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Peugeot Citroen swings to loss

Source: Reuters - Thu 30th Jul 2009

French carmaker PSA Peugeot Citroen on Wednesday swung to a first half loss with sales down over a fifth, and said it saw a recovery in the European automobile market starting towards the end of 2010.

PSA reiterated that it expected a recurring operating loss of between 1 and 2 billion euros (864 million and 1.73 billion pounds) for the full year in an environment that would remain "difficult." It said it saw the European market declining 12 percent in the year as a whole, with a 7 percent drop in the second half.

The group recorded a net loss of 962 million euros, compared with a net profit of 733 million euros in the same period last year before the industry was engulfed in a sales crisis.

Operating loss for the first half was 1.332 billion euros, compared with an operating profit of 1.029 billion euros in the first half of 2008. The group had a recurring operating loss of 826 million "due to adverse market and industry conditions" it said in a statement.

Analysts polled by Reuters had estimated sales of 24.08 billion euros, a recurring operating loss of 720 million euros and a net loss of 926.5 million euros on average. Four analysts supplied the net and operating profit estimates, and seven estimated the sales figure. Analysts said earlier in the week that comments on strategy by new Chief Executive Philippe Varin would take precedence over the first half results themselves. The group was due to hold a webcast analysts' conference at 0630 GMT (7:30 a.m. British time) and a news conference at 0800 GMT (9 a.m. British time).

Earlier this month PSA Peugeot Citroen posted a 17.5 percent drop in sales of assembled vehicles. Including sales of completely knocked-down (CKD) kits, which are shipped for assembly in markets such as Iran, sales fell 14 percent.

PSA said on Wednesday it expected to increase market share in Europe above 14 percent in the second half, thanks to new model launches.

The car industry has been hit by an unprecedented sales crisis and many governments have stepped in to help beleaguered carmakers by launching scrapping incentive schemes,

Makers of small cars, including PSA Peugeot Citroen, and fellow French manufacturer Renault , which reports its own first half results on Thursday, have benefited.

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