Renault profits plunge in first annual earnings since Ghosn arrest

Renault profits fell sharply last year, the French automaker said Thursday in its first annual results since the shock arrest of former boss Carlos Ghosn.

Net profits for 2018 plunged 37 percent from a record 5.1 billion euros ($5.75 billion) the previous year, hit by a lower contribution from its Japanese partner Nissan and changes in exchange rates in some emerging countries.

“This decline came mainly from Nissan’s contribution, down 1.282 billion, which notably benefited in 2017 from a one-off gain of 1.021 billion,” Renault said in a statement.

Nissan on Tuesday slashed its full-year forecast as nine-month net profit dropped 45 percent.

The results came as Renault, Nissan and its partner Mitsubishi Motors are seeking to turn the page on Ghosn’s arrest in Tokyo in November.

Ghosn is accused of under-reporting millions of dollars in salary as head of Nissan, Renault’s partner in an alliance Ghosn built up into the world’s top-selling auto group.

Last month he resigned as CEO of Renault, having already been stripped of his chairman titles at Nissan and Mitsubishi.

He has been in a Tokyo detention centre for three months with little prospect of release before a trial that could take months to materialise.

Renault said sales were down 2.3 percent at 57.4 billion euros, largely due to the effect of falling currencies in Argentina, Brazil, Russia and Turkey where the group has strong presence.

The company last month announced record sales of 3.9 million vehicles in 2018.

Operating margins fell 6.3 percent to 3.61 billion euros, or 6.3 percent of revenues.

“In 2018, Groupe Renault maintained its strong performance, despite the business environment deterioration,” said Thierry Bollore, Ghosn’s successor as CEO.

“The commercial and financial results demonstrate the Group’s resilience and its rapid adaptation to a more challenging environment. This performance is the result of a clear strategy, increasingly stringent execution and the efforts of all Group employees”.

In 2019, the group said “both the global and European market are expected to be stable compared to 2018,” and Renault aimed to increase revenues and achieve an operating margin of around 6.0 percent.