Peugeot Resumes Dividend as Profit Jumps -- Update

By Nick Kostov

PARIS--Peugeot (UG.FR), the French car maker in advanced talks to buy the European operations of General Motors Co. (GM), is to pay its first dividend for six years after posting a sharp rise in net profit for 2016.

With its full-year results on Thursday, the French car maker announced it will make a payout of 0.48 euros ($0.51) a share, having achieved a net profit of EUR2.15 billion, up 79% from the previous year.

Resuming dividend payments at this level for the first time since the payment for 2010 will mean shareholders share in a payment of EUR430 million.

Operating income rose to EUR2.61 billion from EUR1.97 billion a year earlier, while revenue fell 1.2% to EUR54.03 billion, Peugeot said.

Having taken over in 2014, Peugeot's Chief Executive Carlos Tavares uickly slashed costs by reducing the number of cars it makes and cutting the workforce, while preaching the dangers of expanding too fast or chasing sales with discounts. He has recently changed his tune, mounting an audacious bid to buy General Motors' troubled Opel unit and Malaysian auto maker Proton Holdings Bhd.

Mr. Tavares said the 2016 performance showed the success of the company's structural transformation and had been achieved in "an adverse environment."

Chief financial officer Jean-Baptiste de Chatillon told reporters there was no guarantee that an agreement could be found with General Motors for the acquisition of its European operations but that Peugeot's financial health now allowed it to consider this type of operation.

The auto maker, officially known as Groupe PSA SA, is targeting revenue growth of more than 10% by 2018 compared with 2015.

The company said it expects auto markets to be stable in Europe, Latin America and Russia, and sees growth of 5% in China in 2017.

-Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

February 23, 2017 01:28 ET (06:28 GMT)

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