Renault sales and profits fall on diesel setback

Renault’s revenue and profits fell in 2018, hit by collapsing diesel sales, exchange-rate setbacks and a withdrawal from the Iranian market.

Revenue fell 2.3 percent to 57.42 billion euros, while recurring operating profit dropped 6.3 percent to 3.61 billion, for a 6.3 percent operating margin, the company said in a statement Thursday thet reported annual earnings.

Net income came in at 3.3 billion euros, down sharply from the 5.31 billion recorded in 2017.

Excluding currency effects, revenue would have risen 2.5 percent, Renault said, Automotive News reads.

“2018 was clearly a challenging year in which we faced expected as well as unexpected difficulties,” new CEO Thierry Bollore said. The results “demonstrate the group’s resilience,” he said.

Renault said sales to partners including Nissan fell by 946 million euros ($1.1 billion) in 2018, reflecting collapsing diesel demand. A further negative impact is expected this year, the company said.

Nissan’s contribution to Renault earnings came in at 1.51 billion euros, a 46 percent decline from 2017 when Nissan’s profit was inflated by one-off gains.

Renault’s own cost-saving efforts in purchasing and manufacturing contributed 421 million euros to profit, a 37 percent decline.

Renault set a weaker profit goal for 2019, citing exchange-rate challenges and market uncertainties. The company targeted profitability of “around 6 percent,” compared with 6.3 percent in 2018.