PSA delivers a profit despite pandemic
The owner of Peugeot insists that its $50bn merger with Fiat Chrysler remains on track
PSA, the owner of Peugeot, managed to eke out a profit in the first half of the year despite the pandemic wreaking havoc on the car industry.
The French company said on Tuesday that net profit fell from €1.8bn in the first half of 2019 to €595m this year. Revenues tumbled 34.5 per cent to €25bn.
“This first half result proves the group’s resilience, as a reward of six consecutive years of intense work,” said chief executive Carlos Tavares.
Like all rivals, PSA has been hammered by the drop in demand brought by the pandemic, and the group’s shares are down 30 per cent this year.
Operating margin at the automotive division fell sharply to 3.7 per cent in the first half of 2020, below the 8.7 per cent achieved last year.
PSA said that its $50bn merger with Fiat Chrysler remains on track, but the deal must still be given the green light from regulators in Brussels, which has launched an in-depth investigation.
The fear in Brussels centres on the highly lucrative small van segment, where a combined PSA-FCA would have a third of the European market, more than double the 16 per cent of Renault or Ford, the two closest competitors.
The European Commission has stopped the clock on the investigation as it awaits requested data from both companies. The merged group, which is set to be the world’s fourth-largest carmaker, is to be called Stellantis.
The deal was announced formally in December and Mr Tavarez said PSA is “determined to achieve solid rebound in the second half of the year, while finalising the birth of Stellantis before the end of the first quarter 2021.”