PSA doubles 2016 profit, announces first divi in six years

PSA, the maker of Peugeot and Citroën cars, on Thursday reported a doubling of full-year profits in results that highlighted the growing strength of the company as it attempts to buy the European operations of General Motors.

The maker of Peugeot and Citroën announced its first dividend in six years and raised its medium-term profitability goal as it reported a 92 per cent rise in net income to €1.73bn. Recurring operating income was up 18 per cent at €3.2bn.

Jean-Baptiste de Chatillon, the chief financial officer, said that while there was “no certainty” that the GM talks would lead to a deal, the company’s €6.8bn net cash position will allow the group to “deploy this cash to make profitable investments.”

He added that stronger pricing, sales of higher-value models and cost cutting across the European operations in recent years helped lift the automotive operating margin to a record 6 per cent last year from 5 percent in 2015.

“These results demonstrate our ability to consistently deliver an excellent performance in an adverse environment,” said Carlos Tavares, the chief executive. “The group is building the conditions for profitable and sustainable growth.”

Mr Tavares was this week scrambling to put the final touches to a deal to buy the European operations of General Motors, which would create the region’s second largest carmaker by volume.

The chief executive spoke to UK Prime Minister Theresa May on the phone yesterday, and will meet with UK union leaders on Friday, after already meeting with French and German officials to win support.

He this week pledged to respect all existing job guarantees of the European operations of General Motors in an attempt to quell the potential political storm that is brewing around the deal.

There was anger last week from politicians and unions after GM and PSA confirmed they were in talks over a deal which analysts and industry insiders say could lead to thousands of job cuts.