While INSEE is due to quantify on Friday the magnitude of the vertiginous decline in activity in France in the second quarter, several large French and European groups announced very significant losses this Thursday morning, mainly due to the economic crisis caused by the coronavirus pandemic and containment in many countries.
Renault in double turmoil. In the first half of the year, the French car manufacturer suffered the heaviest net loss in its history, at € 7.3 billion. Led by Nissan before the pandemic, to the tune of € 4.8 billion, the group announced at the end of May the elimination of 15,000 jobs, including 4,600 in France.
“The situation is unprecedented, it is not without appeal,” commented the new Managing Director, Luca de Meo, who took office earlier this month. "I have every confidence in the group's ability to bounce back," he added.
These figures contrast with those of French rival PSA (Peugeot, Citroën) which managed to make money in the first half despite the crisis, with a net profit of € 595m.
Volkswagen patina. Among our German neighbors, the automotive market is also at half mast. The Volkswagen group, launched several years ago in a major restructuring plan after the “dieselgate”, recorded a pre-tax loss of € 1.4 billion in the first half, under the effect of a drop in its turnover of 23% (+0.7 billion from January to March, -2 billion from April to June). The number of cars sold in six months fell 27% to 3.9 million units, especially in April, and the market since June has not yet made up for the shortfall. Therefore, the firm lowers the dividend for the 2019 financial year, to 4.86 euros per share (against 6.56 euros until then).
Airbus red record. The planetary crisis which has pinned planes to the ground has cost the European aircraft manufacturer dearly, which announces a net loss of € 1.9 billion in the first half of the year. "The impact of the Covid-19 pandemic on our finances is now very visible in the second quarter, with deliveries of commercial aircraft halved compared to last year", observes the executive chairman of Airbus Guillaume Faury, quoted in a press release. Airbus delivered 196 planes in the first six months of the year, half the number of the first half of 2019. Its turnover fell by 39% over the half to € 18.9 billion. Airbus had already announced that it would cut 15,000 jobs around the world, including 5,000 in France, which will cost it between 1.2 and 1.6 billion euros in social measures. When planes no longer fly, airlines do not buy them for several years. To adapt to an upturn in air traffic, which should only return to its 2019 level between 2023 and 2025, the aircraft manufacturer has lowered its production rates by 40% compared to what it predicted before the crisis, with 40 Airbus A320s produced per month (compared to 60 in 2019), 4 A220s and 2 A330s. This morning he announced "a small adjustment in the production rate of the A350 from 6 to 5 aircraft per month"; it takes 9 to 10 to balance on this program.
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EDF is preparing disposals. With a net loss of € 700 million in the first half, EDF announced on Thursday a savings and disposal plan to offset the effects of the crisis. The electrician's objective is to reduce its operating expenses by € 500 million between 2019 and 2022 and to commit around 3 billion new disposals by 2022. On the other hand, there is no question of launching social plans. "We are going to regulate the group's workforce by not replacing all departures and by facilitating the mobility of employees to activities with higher potential for those who would be in activities with lower potential", explained during d 'a conference call with CEO Jean-Bernard Lévy.
Total takes an unprecedented slap in five years. First net loss since 2015 for the French oil and gas giant, which reached $ 8.4 billion, against a profit of 2.8 billion a year earlier. Against the backdrop of depressed oil and gas prices, Total's assets suffered heavy write-downs and adjusted profit fell 96% in the second quarter ($ 130 million).
Eni and Shell, same punishment. The Italian hydrocarbon giant recorded an abysmal net loss in the second quarter: € 4.4 billion. In total over the half-year, the loss amounted to € 7.3 billion. Quarterly turnover for its part fell by 56%, while production fell by 6.6%. To make up for this result, the group will reduce its investments, particularly in exploration, and optimize its costs. Eni also plans to pay few dividends to its shareholders in 2020 and 2021.
At Shell, too, daily production fell by 6%. But the Anglo-Dutch company recorded a net loss in the second quarter of $ 18.1 billion in the second quarter, due to huge write-downs of assets. Last year, Shell had generated a net profit of € 3 billion.
