PARIS -- French car-part maker Faurecia posted a sharp fall in first-half net profit, hurt by restructuring charges and as high raw material prices continued to squeeze margins, kicking its shares lower.
Europe's second-biggest listed car-part maker said on Thursday it expected the second half of the year to be in line with the first six months.
It added that the effect of high raw material costs on its performance in the second half should be similar to that seen in January to June, when the impact was around 150 million euros. Purchased raw materials -- steel and plastics -- account for almost 12 percent of Faurecia's sales.
The company said net profit fell 42.2 percent to 34.5 million euros ($41.65 million) from 59.7 million in the year ago period after it took a larger-than-expected 62.4 million euro restructuring charge.
Earnings before interest, tax and goodwill writedowns fell 28.1 percent to 160 million euros with the margin coming in at 2.9 percent versus 4 percent previously.
Faurecia, which makes seats, doors and exhaust systems and is more than 70 percent owned by carmaker PSA Peugeot Citroen, said it expected car production in Europe in the second half of the year to be lower.
"Net profit fell markedly compared with our forecast of 66 million euros. The restructuring charge in the first half was higher than our 20 million euro forecast," a Paris-based analyst said. "The outlook for the second half is vague but rather grim," he added.
Car-part makers have come under pressure as raw material costs remain high while carmakers have resisted paying more for parts, desperate to protect their own margins in the face of lackluster demand and cut-throat price competition.
General Motors, the world's largest automaker which is battling to regain market share from Asian rivals, posted an unexpected quarterly loss on Wednesday on stubbornly high costs including materials and worker heath care.
Faurecia said sales rose 1.7 percent to 5.613 billion euros, helped by strong growth outside Europe, particularly in Asia, South and North America.
It said that it continued to implement measures to generate growth and improve competitiveness, including boosting its research and development activities, reinforcing its R&D centers in France and accelerating restructuring efforts.