Peugeot says it will post a big 2009 loss
PEUGEOT Citroen said it expected to lose as much as €2bn (£1.7bn) in 2009 as it launched a convertible bond to raise €575m yesterday – but its European sales will fall less sharply than feared.
Peugeot Citroen said that while the European car market was still down compared with 2008, the company’s “best current estimate” was for a decline of 12 per cent in European unit sales instead of the 20 per cent previously forecast.
The group forecast a recurring operating loss of between €1bn and €2bn, citing uncertainties over whether governments would continue supporting the sector next year, and volatile raw material prices and exchange rates.
“One to two billion is in line with market expectations,” said Credit Suisse analyst Stuart Pearson. “We were expecting something to strengthen their balance sheets from all the mass makers.”
Carmakers need to prepare for the end of scrapping schemes — whereby drivers get cash incentives for trading in old cars for newer, greener models — which could make for a tough 2010, Pearson said. Peugeot Citroen said in February it expected to remain in the red until 2010 after reporting an unexpected net loss for 2008.
The offering of bonds convertible into new or existing Peugeot Citroen shares is intended to raise between €500m and €575m. The offer runs from 23 to 25 June and the bonds are due on 1 January 2016.
“The funds…will provide the general financing needs of the group as well as…its existing and future development projects in the automobile business,” the group said in a statement, not ruling out more bond issues. It added it was not exposed to any liquidity risk for the next 12 months.
For its future plans, it cited the development of the Peugeot 5008 in the second half of this year, engine efficiency and electric motors and expansion in Russia and China.