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Wednesday July 18, 2:16 PMCar parts group Faurecia has smaller H1 lossPARIS, July 18 (Reuters) - French car parts group Faurecia reported a smaller first-half loss than a year ago but its operating margin weakened to one percent and it said sales growth in the second half would be less than in the first.The group controlled by PSA Peugeot Citroen, which in February dispatched its group finance director Yann Delebariere as new chief executive at the subsidiary, said the first half loss was 47.4 million euros ($65.39 million) versus 48.2 million last year and a loss of 399.7 million the second half. Operating income was down to 62.8 million euros versus 85.1 million last year and a loss of 15.9 million in the second half. "It is better than expected, the consensus for operating was more 25 to 30 million, but it remains weak. However, it us the start of a recovery," said Olivier Pouteau at brokers Oddo. Faurecia unveiled six priorities for a turnaround. "The upturn in operating income compared with the second half of 2006 is attributable to increased activity and improved manufacturing performance, despite the significant losses made on operations in North America," it said It took 39.9 million in restructuring provisions mainly for manufacturing sites in France and Spain, which is less than the 107.6 million of a year ago and sales rose to 6.51 billion euros from 5.98 billion, leading to a lower operating margin of 1.0 percent versus 1.4 percent a year ago. "2007 should see further growth for the group, although at a slightly less sustained rate in the second half than in the first, and the containment of its debt. This year therefore represents the first step in Faurecia's operational recovery plan," it said in a statement. It said its consolidated sales rose 8.9 percent in the first half. At constant exchange rates and on a comparable basis sales excluding monoliths -- parts for catalysers -- were up 7.7 percent. Exchange rate variations had a negative impact of 1.1 percent, while the integration of Cadence Innovation France had a positive effect of 0.9 percent. DEBT EASES Net financial debt at the end of the first half of 2007 was 1.6 billion euros, down 88.4 million euros compared to the net debt at December 31, 2006. It said the improvement had been achieved by containing capital expenditure -- at 2.1 percent of sales in the first half -- and by lowering the working capital requirement. It said its recovery plan was based on six priorities. It aimed to reduce quality defects by a factor six by end 2008 and improve technical and economic control of new programs. It wants to improve manufacturing efficiency and reduce costs by raising productivity and redeploying manufacturing facilities in Europe while increasing purchasing in low-cost regions. It aims to ensure return to break even in North America in 2009 and boost product development to extend the depth and range of our product-service and solution offerings. Finally it aims to continue internal growth in each of its businesses with consolidation in Europe, continued growth in the United States and development in Asia and South America. Faurecia is the world's number one maker of instrument pnales and doors, Europe's number one in exhaust systems and so-called front-end -- bumper, lights, impact absorption, and number two in acoustics and seats. Its biggest customers are PSA, Volkswagen AG and the Renault Nissan alliance. |
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