Peugeot Citroen does not expect to return to profit until 2010 after it made an unexpected loss for 2008 following hefty writedowns as the global economic crisis puts the brakes on car sales.
The group posted a €343 million ($444.5 million) net loss and said it would focus on cutting stocks and minimising cash burn in 2009, when it expects another loss.
Europe's second-biggest carmaker is, along with its peers, struggling to cut inventories of unsold vehicles in the face of sales that have slowed to a trickle as the credit crunch stifles consumer confidence.
The year 2010 would originally have been the end of a profit recovery programme for the company.
PSA Peugeot Citroen shares were down 3 per cent at 8.53am, having earlier fallen more than 7 per cent, against a CAC-40 index down 0.2 per cent, while Renault shed 4.2 per cent.
Financial analysts had expected a net profit of some €180 million for last year. The net loss compared to a 885 million euro net profit recorded in 2007.
The group booked non-recurring charges totalling €917 million in 2008 as it cut headcount and adjusted for lower expected volumes ahead, finance director Isabel Marey-Semper told a conference call.
The automotive division accounted for €473 million of the charges, while parts supplier Faurecia, in which it owns a 71 per cent stake, accounted for €431 million.
The company's 2008 capital expenditure amounted to €3.8 billion, leaving it with negative free cash flow of €3.764 billion at the end of the year.
“We must concentrate all our efforts on reducing inventory and minimising our cash consumption,” CEO Christian Streiff said today in a statement.
Yesterday Mr Streiff had said the car industry downturn had turned into a global catastrophe and he expected 2009 sales to fall by at least 20 per cent.
He added the group aimed to return to profit in 2010 but expected a particularly difficult first half of 2009 and a loss-making full year with negative free cash flow.
Reuters