PARIS (dpa-AFX) - French car maker PSA Peugeot Citroën (PEUGF.PK) reported Wednesday higher revenues in its third quarter, on improved performance in China and Europe. Looking ahead for 2014, the company projects higher-than-expected automotive demand in Europe and weaker-than-expected demand in Latin America and Russia.
The company, which has been making hefty losses for some time now, maintained its goal of returning to breakeven in 2017, and also maintained margin growth forecast for 2018 onwards.
In the third quarter, the company's revenues totaled 12.296 billion euros, a 1.6 percent increase from the prior year period.
Automotive Division revenues, excluding Chinese joint ventures contribution, edged back 0.8 percent to 7.971 billion euros.
Pro forma Automotive Division revenues, including share in Chinese Jvs, amounted to 9.085 billion euros, up 2.7 percent, reflecting the very strong increase in revenues in China.
In the quarter, Faurecia revenues went up 6.5 percent, while Banque PSA Finance's revenues declined 2 percent.
Worldwide unit sales in the quarter increased 5.4 percent year-over-year to 643,598 units.
European unit sales grew 7 percent as the market expanded by 5.8 percent over the period, with certain countries experiencing strong growth, while French market was almost stable. The company's market share in Europe held steady at 11.8 percent by the end of September.
Unit sales in Asia climbed 44.4 percent with strong growth in China. In Latin America and Eurasia, unit sales declined 38.2 percent and 62.4 percent, respectively, hurt by a sharp decline in demand.
In the Middle East and Africa and the India-Pacific region, unit sales dropped 11.3 percent and 10.5 percent, respectively. According to the firm, these markets represent future opportunities.
The company said it pursued its Back in the Race action plans, which focus on rationalising fixed costs and adjusting the line-up, with the goal of returning to breakeven in 2017.
Carlos Tavares, Chairman of the Managing Board, said, 'All levers are now activated and first results are visible. Nonetheless, the road back to a full recovery is still long and we should remain collectively focused on execution.'
Looking ahead for fiscal 2014, Peugeot now expects to see automotive demand increase by around 4 percent to 5 percent in Europe and by approximately 10 percent in China, but demand will decline some 10 percent in Latin America and around 15 percent in Russia.
Previously, the company had projected demand to increase around 3 percent in Europe and around 10 percent in China, but decline by some 7 percent in Latin America and around 10 percent in Russia.
Peugeot continues to target an operating margin of 2 percent in 2018 in the Automotive Division, with the objective of reaching 5 percent over the period of the next medium-term plan, covering 2019-2023.
The company also projects recurring positive operating free cash flow by 2016 at the latest, and an aggregate 2 billion euros in operating free cash flow over the 2016-2018 period.
In Paris, Peugeot shares were gaining 0.22 euros or 2.33 percent, and trading at 9.59 euros.
Copyright RTT News/dpa-AFX