Two rating agencies have improved their assessments of Renault Monday, Fitch up a notch note of the French automaker category of borrowers without risk (investment) while Moody’s had changed its outlook from “stable” to “positive”. Improving decided by Fitch, to “BB +” to “BBB-” with “stable” long-term perspective, “reflects the recovery of the profitability of Renault and its ability to generate margins in a difficult environment, especially for high volume manufacturers, “the agency said in a statement.
” The group’s operating margin exceeded 3% in 2013 and we expect further improvement in the medium term, including a strengthening of heart operations automotive business, “said Fitch. “We believe that the restructuring measures bold Renault have smoothed its cost structure, lowered its breakeven point and made it more resistant to possible sharp drop one or more of its markets,” the source said .
“The healthy liquidity position of Renault and its solid financial structure will allow it to address the next cyclical downturn or potential financial difficulties with more flexibility without jeopardizing its credit fundamentals” has further stated Fitch. The agency noted that Renault remained dependent on the European market, where the South suffered from the crisis in the euro area. “However, ongoing diversification, successful, has to grow market share outside Europe.”
Fitch also noted the success of the range input group, Dacia, including “profitability (…) is higher than the average automobile sector and strengthens the operational benefits of the group.” For its part, Moody’s maintained its rating “Ba1″ but was subject to a “positive” perspective against “stable” before.
Moody’s analyst Yasmina Serghini-Douvin, this improvement “reflects the overall operational performance of Renault, particularly driven by the success of recent launches and reduce costs.” “We also expect that the launch of upcoming models, particularly in areas C and D (middle and high-end, Ed), a continuous optimization of costs and an increase in industrial integration with Nissan gradually strengthen its profitability in the medium term, “the analyst added.
October 29, Renault announced a turnover up 6.7% to € 8.5 billion in the third quarter and confirmed its targets for 2014.
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