By Gilles Guillaume
BOULOGNE-BILLANCOURT, France (Reuters) -French carmaker Renault offered a dividend for the first time in four years and saw a strong increase in its operating margin despite swinging back to losses in 2022 as it took a hit from its pullout from Russia.
Renault, which is revamping its 24-year old alliance with Nissan, said on Thursday that it was targeting a group operating margin of 6% or more in 2023, after it reached 5.6% in 2022, twice as high as in 2021 and slightly above expectations.
It said a dividend of 0.25 euros per share will be proposed to the vote of the annual general meeting on May 11.
Renault’s automotive operational free cash flow, under scrutiny from analysts, reached 2.1 billion euros last year, beating analysts’ expectations.
Its core car business’ financial situation was back in the black at 549 million euros, compared to a 1.1 billion debt in 2021.
The group share of net income saw a 338 million euro loss, sharply down from an 888 million euro profit in 2021 but broadly in line with an analyst consensus provided by the company that saw a 310 million euro loss.
Renault, which had returned to profit in 2021 after two years in the red and a historic loss in 2020, said its net income without the disposal of its former Russian unit Avtovaz, was up from 2021, and stood at 1.6 billion euros.
Renault sold its majority stake in Avtovaz to the Russian state for reportedly just one rouble last year, but with a six-year option to buy it back.
“Renault Group’s fundamentals have been thoroughly cleaned up and there will be no turning back. 2023 financial outlook and the return of a dividend illustrate this,” CEO Luca de Meo said in a statement.
Under a deal announced earlier this month, Renault, will cut its stake in Nissan to 15% from 43% now, in a reboot of their long and sometimes contentious alliance.
The lopsided relationship between the two car makers, which was deeply strained by the 2018 arrest of its architect and former chairman, Carlos Ghosn, amid financial scandal, had long been a source of friction among Nissan executives.
The agreement, which came after months of tense talks, will also see Nissan buy a stake of up to 15% in Renault’s electric vehicle unit Ampere.
(Reporting by Gilles Guillaume; Editing by Ingrid Melander)
