PARIS -- Europe's largest listed car-parts supplier Valeo on Thursday posted a 34.8 percent rise in first-half operating profit and pledged continued improvement in the second half.
Valeo's first-half operating income rose to 240 million euros (dollars) from 178 million a year earlier, with the operating margin gaining 1.3 percentage points to 4.6 percent.
Sales fell 5.2 percent to 5.184 billion euros due to asset sales and a slowdown in the car industry, the company said.
Net income of 68 million euros contrasted with a net loss of 128 million euros in the first half of 2001.
"In market conditions that remain tough, Valeo will continue to improve its results in the second half of 2002," Chairman Thierry Morin said in a statement.
Morin has been battling to restore profitability at what a company that is faced with sluggish car markets in Europe and North America.
Pressure has grown from his main customers such as General Motors and PSA Peugeot Citroen for lower prices. In response, Morin has shut or sold many plants and moved production of basic products to cheaper labor markets.
Valeo posted a hefty loss in the fourth quarter of last year due to restructuring charges at a loss-making U.S. subsidiary.
Its shareholders last month defeated a poison-pill measure that would have helped the company fight off any takeover attempt by issuing new shares to dilute a predator's stake.
Valeo closed four plants in the first half of the year-- three in Europe and one in Brazil.
Net debt fell 18 percent to 532 million euros on the back of increased operating cash flow and lower inventories.