French carmaker PSA Peugeot Citroën (PEUGF.PK) Wednesday reported a 6.5 percent drop in first-quarter revenue, as demand declined 10 percent in Europe, with particularly sharp drops in the company's strong markets of France, Italy and Spain. Yet, unit sales increased significantly in China. The stock is gaining over 7 percent in Paris.
Consolidated revenues declined to 13.025 billion euros ($16.9 billion) from last year's 13.930 billion euros.
Revenue declined 10.3 percent at the Automotive division to 8.722 billion euros, mirroring a 10 percent contraction in the European market. Worldwide sales were down 2.5 percent at 674,000 vehicles.
Volume contractions were 16.9 percent in Europe and 26.7 percent in Russia, partially offset by a 31.1 percent growth in unit sales in China, Latin America and the rest of the world. The company achieved a market share of 3.9 percent in China.
Revenues from new vehicle sales fell 13.7 percent to 6.022 billion euros.
Sales of completely knocked-down units or CKDs were close to zero during the quarter, primarily due to the suspension of sales to Iran in February 2012 following the tightening of international sanctions and financing difficulties affecting payments.
The Peugeot 301 and Citroën C-Elysée proved highly successful in the emerging markets, with 27,000 units sold in the quarter.
Faurecia revenue advanced 1.7 percent in the quarter to 4.369 billion. Within the business, Automotive Exteriors rose by 8.1 percent and Interior Systems were up by 15.3 percent while Emissions Control Technologies rose 1.1 percent.
For the year, the group expects automobile demand to contract by around 5 percent in the Europe 30 region, while it is estimated to grow by about 8 percent in China, 2 percent in Latin America and stable in Russia.
Peugeot confirmed its objective of halving its operational cash consumption in 2013. If European market environment could be worse than previously expected in 2014, the firm is reviewing operational initiatives to offset such deterioration, with a view to maintaining its objective of restoring breakeven in Group operational free cash flow by the end 2014.
The stock is up 7.4 percent in morning trade in Paris at 5.85 euros.
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