PSA first-quarter revenue jumps 42% on Opel-Vauxhall acquisition

PARIS -- PSA Group posted a 42 percent increase in first-quarter revenue, lifted by its acquisition of Opel-Vauxhall last year.

Group revenue rose to 18.18 billion euros ($22.2 billion), the maker of Peugeot and Citroen cars said in a statement on Tuesday, as vehicle deliveries advanced 44 percent.

Chief Financial Officer Jean-Baptiste de Chatillon said the group is "on track to make this strong performance a solid basis for the future."

Following a 2014 bailout, PSA has recovered to record profitability and is applying its turnaround lessons to Opel-Vauxhall business acquired from General Motors last year. It is currently in a standoff with Germany's IG Metall over plans to suspend a pay increase negotiated by the union.

The Peugeot, Citroen and DS business, which excludes Opel-Vauxhall, posted a 13.3 percent revenue gain to 10.21 billion euros on a 6.6 percent increase in deliveries, while inventory rose 12.3 percent year-on-year to 438,000 vehicles. 

The brands' sales gain came in spite of negative currency effects, as the stronger euro crimped revenue by 2.8 percent. That was more than offset by a 4.5 percent gain from sales of pricier vehicles and trims on models such as the recently launched Peugeot 3008 and 5008 SUVs.

Opel-Vauxhall automotive division revenue was 4.8 billion euros, PSA said, without giving a comparable year-earlier figure.

Analysts Evercore ISI said Opel-Vauxhall revenue was likely helped by an improved product/price mix and the relative success of the new Grandland X and Crossland X models.

In a note to investors, Evercore forecast Opel to still be loss-making in the first half but for this to improve in the second half, leaving Opel to break even for the full year.

PSA reiterated its full-year market outlook and mid-term earnings goals for the Peugeot, Citroen and DS business.

PSA made little progress in reversing its sustained China sales collapse of recent years, with first-quarter registrations up 1.8 percent in the world's biggest auto market. It will take some time"to change the "fundamentals of sales and marketing" and restore the China business to significant profit, Chatillon said.

Automotive News Europe contributed to this report