Faurecia profit drops due to weak Europe car market
PARIS (Reuters) - French auto parts maker Faurecia (EPED.PA) posted a 62 percent drop in full-year net income on Tuesday, due partly to restructuring charges related to falls in production in Europe's sluggish car markets.
The company, which is 57.4 percent-owned by PSA Peugeot Citroen (PEUP.PA), said that while 2012 sales and profits were in line with its expectations, net debt rose more than forecast to 1.81 billion euros ($2.42 billion) from 1.22 billion a year earlier.
"The rapid slowdown in automotive production in Europe, particularly in the last two months of the year, led to an increase in inventories - raw materials and supplies," Faurecia said.
Car manufacturers across Europe are having to cut costs and capacity because the euro zone debt crisis and government austerity program have hit consumer demand.
Faurecia unveiled 3,000 job cuts in November. It also postponed by two years a medium-term target for a 5 percent operating margin. The group said then the European market slump would erode sales in the region for the next five years.
The French company took 84 million euros of restructuring charges in 2012 to adapt to the falling production levels in Europe, it said in its statement on Tuesday. In November, the company had said restructuring charges for 2012-2013 would be a combined 190 million euros.
Full-year sales rose 7.3 percent to 17.4 billion euros, up 2 percent like-for-like. The company said it had outpaced light vehicle production growth in North America, where its product sales rose 41 percent, and in Asia.
The company's operating margin slipped to 3 percent of total sales from 4 percent in 2011. Operating profit fell to 514 million euros from 651 million. Full-year net income fell to 140 million euros.
Faurecia said the 2012 figures were based on estimates and that it would post final results on February 12.