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French group Faurecia holds course in 'tougher than expected' auto market

French group Faurecia holds course in 'tougher than expected' auto market
FILE PHOTO: An illustration shows a car dashboard with a giant screen on the side of the Faurecia booth during the 2019 CES in Las Vegas, Nevada, U.S. January 8, 2019. REUTERS/Steve Marcus -
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STEVE MARCUS(Reuters)
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PARIS (Reuters) – French auto parts maker Faurecia <EPED.PA> maintained first-half profitability despite a China-led decline in auto production and the loss of seating contracts, the company said on Tuesday.

Net income rose 1% to 346 million euros ( £310.7 million ) as revenue dipped 0.2% to 8.972 billion, aurecia said.

“The first half of the year was tougher than expected,” Chief Executive Patrick Koller said, citing “significantly lower production volumes” in China.

Sales fell 3.7% at the seating division, Faurecia’s largest, impacted by the end of supply contracts to PSA Group’s <PEUP.PA> Citroen brand in Spain and Daimler <DAIGn.DE> in Alabama. PSA is Faurecia’s biggest shareholder with a 46.3% stake.

Faurecia’s first-half operating income edged down 0.4% to 644.8 million euros for an unchanged 7.2% operating margin. Its positive net cash flow rose 3.9% to 257 million.

The company reiterated 2019 guidance including a margin of 7% or more and net cash flow of at least 500 million, assuming a 4% decline in global auto production for the full year.

(Reporting by Laurence Frost; Editing by Sudip Kar-Gupta)

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