PARIS -- French auto supplier Faurecia raised its 2021 net cash flow target as it posted higher first-half sales and profits, led by growth in all its main areas.
The supplier's interim sales rose 28 percent from a year ago to 7.78 billion euros ($9.2 billion), while first-half operating income rose to 510 million euros, up from a loss of 100 million euros last year, the company said in a statement.
Faurecia said it was upgrading its 2021 net cash flow target and was now forecasting a net cash flow of more than 500 million euros, up from a previous target of about 500 million.
The company also confirmed its 2021 full-year sales target, namely of reaching sales of at least 16.5 billion euros ($19.5 billion) and for an operating margin of around 7 percent of sales.
Faurecia's upbeat outlook echoed that of its French rival Valeo, which last week also confirmed its 2021 targets as it posted higher first-half sales and profits. Similarly, to Valeo, Faurecia also expected global automotive production to rebound in coming quarters, despite issues over the supplies of semiconductor chips, which are vital for technologically advanced cars.
"We are convinced that automotive production has hit a low in Q2 and should gradually rebound in the coming quarters, despite a shortage of semiconductors likely to last until the end of H1 2022," said Faurecia CEO Patrick Koller.
"In this context, we will pay strict attention to cost (flexability) and cash generation, thus allowing deleveraging and profitable growth," he added.
Faurecia ranks No. 8 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $17.59 billion in 2020.