PARIS -- French carmaker Renault said Tuesday that net profit jumped in 2002 as a generous contribution from its Japanese partner Nissan and stringent cost cutting helped offset a flagging European car market.
Europe's fourth biggest carmaker by sales said operating profit also leaped, allowing it to post an operating margin of 4.1 percent -- above a key target.
In a complex set of results affected by a change in internationally accepted accounting standards, Renault posted net profit of 1.956 billion euros.
Before the accounting change, the figure was 1.359 billion -- up 29 percent from 1.050 billion in 2001 and boosted by a 1.335 billion euro contribution from Nissan Motor, in which it holds a 44.4 percent stake.
Core profit, or what Renault calls operating margin, came in at 1.483 billion euros, or 896 million before the accounting change -- a 90 percent gain on the previous year and at the top end of analyst expectations.
Eleven analysts polled by Reuters expected Renault to post operating profit of 1.394 billion euros and net profit of 1.996 billion euros after the accounting change.
Renault Chairman Louis Schweitzer told reporters the company had swollen core profits thanks to cost cutting, improvement in markets outside Europe and stable sales in its home markets despite faltering demand.
Sales and core profits sagged in the second half of 2002 as its model lineup reached the end of the road. But sales over the whole year remained stable down 0.04 percent, or almost 3 percent higher accounting for asset sales.
Renault said it would boost revenues in 2003 when new models replaced the old versions and kick-start demand, although it did not give precise figures, and said it was aiming to post a stable operating margin of about 4 percent of sales.
Schweitzer said he was banking on a 2 percent dip in the Western European market in 2003, but that it could skid as much as 6 or 7 percent in a worst case scenario, with war in Iraq and a troubled German economy major threats.
He said: "We think the first scenario is more likely, but it is clear that 2003 is going to be a year of major uncertainty."