PARIS, France – Renault’s shares soared on Thursday morning as the French carmaker announced its proposal to increase its dividend per share for the financial year. The company reported a full-year group operating margin of 7.9%, exceeding its prior guidance. This led to a 6.9% increase in Paris-listed shares, reaching 9:27 a.m. London time.
The proposed dividend per share is set to rise to 1.85 euros from 0.25 euros, reflecting Renault’s optimism about its future performance. The company also revealed its goal of achieving double-digit margins by 2030. However, it reported that its net profit fell slightly below expectations, despite a 13% increase in group revenue to 52.4 billion euros.
Renault attributes its focus on “unprecedented” vehicle launches, cost optimization, and the acceleration of its electric vehicle (EV) and software strategy as key factors behind its future success. The company aims to target a group operating margin of 7.5% or higher and free cash flow of at least 2.5 billion euros in 2024. This is a slight decrease from the 3 billion euros in 2023.
Moreover, Renault’s decision to scrap plans to publicly list its new electric vehicle and software business Ampere led to a 2% gain in shares this year. The company’s CEO, Luca de Meo, expressed optimism about the future despite acknowledging the current challenges in the EV market. He highlighted Renault’s plans to launch 10 models, including EV cars, to take advantage of a favorable product lifecycle.
Market analysts have also expressed positivity about Renault’s proposal to increase the dividend and its progress in improving operating margins. However, they have also acknowledged the challenges in the EV space, citing the pressure on pricing and the cost-conscious nature of motorists amid economic headwinds.