PARIS, July 27 – French car parts group Faurecia said on Monday it expects to return to profit and cash generation in the second half of the year helped by cost controls after reporting a first-half operating loss due to the COVID-19 crisis.
Faurecia targets sales of around 7.6 billion euros ($8.89 billion), an operating margin of around 4.5% of sales and net cash flow of around 600 million euros for the second half of the year, the statement said.
CEO Patrick Koller also told BFM business radio that the company had good visibiity over the third quarter but that there were more uncertainties regarding the fourth quarter.
The company reported a first-half operating loss of 114 million euros which included a 20 million euro one-off charge related to the coronavirus crisis. Like-for-like sales fell 35.4%.
“In the medium term, our focus on key priorities in the new post-COVID-19 market environment gives us confidence in our ability to achieve our profitability and cash generation ambition for 2022,” Koller said in the statement.
Those 2022 targets include an operating margin of 8% of sales and net cash flow of 4% of sales, with sales above 18.5 billion euros.
Global car sales have slumped as measures to contain the pandemic forced production lines to shut and showrooms to close.
($1 = 0.8550 euros) (Reporting by Dominique Vidalon; Gilles Guillaume; editing by Krishna Chandra Eluri and Jason Neely)