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Renault first-half net profit up 56% to €1.2 billion

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12:19 CEST+02:00

French car maker Renault saw its first-half profits soar to €1.2 billion despite losses caused by the earthquake in Japan, it said on Thursday in an earnings statement.

Net profit rose 56 percent to €1.25 billion ($1.72 billion) on record sales that rose 7.3 percent to €21.1 billion, while the earthquake which hit car major parts suppliers cost Renault €150 million.

"The financial results were impacted by external events, including supply constraints, which will subside in the second half, and a considerable increase in the cost of raw materials," said chief executive Carlos Ghosn.

He said in the statement the group maintained its outlook for operational free cash flow -- a key measure of profitability -- at more than €500 million this year.

"The supply constraints stemming from the Japanese tsunami had an unfavourable impact on the operating margin of automotive of an estimated €150 million in the first half," the statement said.

The company said it expected the consequences of the earthquake would cost it a further €50 million this year.

"Supply constraints are expected to subside gradually in the second half, enabling a strong recovery in production from September."

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