© Reuters. Renault 4 electric is presented at the 2022 Paris Auto Show, France, October 17, 2022. REUTERS/Stephane Mahe/File Photo
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By Gilles Guillaume
BOULOGNE-BILLANCOURT, France (Reuters) -French car maker renault (EPA:) announced a dividend for the first time in four years as its ongoing revamp begins to bear fruit with better-than-expected operating margins.
Although the company returned to loss under the impact of its withdrawal from Russia, the group’s operating margin in 2022 doubled from a year earlier to 5.6% thanks to a strategy focused on new launches, electric vehicles and fewer discounts, it said. Thursday.
“Group Renault’s fundamentals have been thoroughly cleaned and there will be no turning back,” Chief Executive Luca de Meo said in a statement. “(The) financial outlook for 2023 and the return of a dividend illustrate this.”
Renault, which is renewing its 24-year alliance with Nissan (OTC:), is now aiming for a group operating margin of 6% or more this year.
He proposed a dividend of 0.25 euros per share, the first since a payment of more than 3 euros per share in 2019, to be approved at the annual general meeting on May 11.
Renault’s automotive operating free cash flow, under analyst scrutiny, hit a record 2.1 billion euros ($2.25 billion) last year, beating the analyst consensus of 1.68 billion euros provided by the company.
The automaker, which had returned to profit in 2021 after two years in the red, said net income excluding the sale of its former Russian unit Avtovaz rose by 1.1 billion euros from 2021 to 1.6 billion euros.
Renault sold its majority stake in Avtovaz to the Russian state last year, reportedly for just a ruble but with a six-year option to buy it back.
Under a deal announced this month, Renault will cut its stake in Nissan from 43% to 15% in a restart of their long and sometimes contentious alliance.
The lopsided relationship between the two automakers was deeply strained by the 2018 arrest of their architect and former chairman, Carlos Ghosn, amid a financial scandal.
The deal, which came after months of tense talks, will also see Nissan buy up to a 15% stake in Renault’s electric vehicle business Ampere.
($1 = 0.9341 euros)
