(Bloomberg) -- French automaker PSA Group held on to its financial outlook even after profit slumped in the first half of the year, when pandemic lockdowns hammered vehicle sales in some of its biggest markets.
The company posted a net income of 595 million euros ($698 million), compared with 1.83 billion euros a year earlier, it said Tuesday. PSA reiterated its forecast of a positive automotive adjusted operating margin in 2020.
“This shows the group’s resilience,” Chief Financial Officer Philippe de Rovira said on a call with reporters, adding that sales in June and July were good.
The maker of Peugeot (OTC:PUGOY), Citroen, Vauxhall and Opel vehicles is among the most vulnerable to a downturn in its largest market Europe, where the health crisis has dragged down economies from France to Britain and Italy. While car sales in the region have been slowly recovering from a record plunge in April, they’re still expected to fall by a fifth this year, according to a forecast by Bloomberg Intelligence.
The French manufacturer expects the European auto market to shrink by 25% this year, with contractions of 10% in China as well as 30% in Latin America and Russia. PSA has ramped up its European factories after closing them in mid-March.
PSA, which is working to gain European Union antitrust approval to merge with Italian-American peer Fiat Chrysler Automobiles NV (NYSE:FCAU), kept its outlook for an average automotive adjusted operating margin of more than 4.5% for the 2019-2021 period. It came in at 3.7% in the first half.
The company also reiterated a target to close the deal by the end of the first quarter next year.
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