Renault to speed up state aid repayment after returning to profit

Adds details on outlook, dividend, state loan, electric vehicle ambitions

PARIS, February 18 (Reuters)Renault RENA.PA plans to repay state aid it has received amid the coronavirus pandemic sooner than expected, the French automaker said on Friday, after posting a profit in 2021, beating expectations as it overturned two consecutive years of losses.

The group had already repaid 1 billion of the 4 billion euros ($4.55 billion) in loans it had received to help it cope with the fallout from the pandemic, and plans to repay the rest before contractual maturity of 2024. At least 2 billion will be repaid this year, and full repayment by the end of 2023 at the latest.

The automaker reported group share net profit of 888 million euros ($1.0 billion), beating the expectations of analysts polled by Refinitiv, who had seen the figure at 818.7 million euros.

An operating margin of 3.6% exceeds the group’s own objectives and places it two years ahead of its “Renaulution” recovery plan, which aimed for a margin of more than 3% in 2023.

Renault said that since it exceeds its medium-term targets, the group will hold a capital markets day in the fall of this year to take stock of progress.

The improved results follow the launch of a major restructuring aimed at reducing fixed costs and refocusing on Renault’s most profitable car models and markets.

“With these 2021 results, Groupe Renault is taking another step in its recovery,” Chief Financial Officer Clotilde Delbos said in a statement, attributing the performance to the early successes of the “value over volumes” strategy and its “strict discipline. financial”. “

For this year, the group, which had faced falling sales, margins and difficulties at its close partner Nissan 7201.Tis aiming for an operating margin above 4%, and an automotive operating free cash flow greater than or equal to 1 billion euros, after the 1.6 billion euros recorded last year and an outflow of 4.5 billion in 2020.

The group, hard hit by the pandemic and subsequent semiconductor shortages and supply chain issues that have plagued the auto industry, will not offer any 2021 dividend as it still prioritizes improvement results and repayment of the State loan.

Compete with bigger automakers with deeper pockets like Toyota 7203.T or Tesla TSLA.Othe group also confirmed its ambition to make the Renault brand fully electric by 2030.

He indicated that he also planned to group together his thermal and hybrid engine and transmission activities based outside France within a dedicated entity.

($1 = 0.8797 euros)

(Reporting by Gilles Guillaume; Writing by Piotr Lipinski; Editing by Kenneth Maxwell)

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