PSA Reports Record Annual Loss

PSA Peugeot Citroen swung to a record €5 billion net loss in 2012 year from a €588 million profit in 2011. Revenue fell 5% to €55.4 billion.

Last year's sharp decline was caused largely by €4.7 billion of one-time charges for restructuring and writing down the value of its auto assets. The company narrowed its operating deficit to €576 million from €647 million last year.

But losses at PSA's auto unit last year deepened to €1.5 billion from €92 million in 2011. Vehicle revenue dropped 12% to €27.8 billion despite improvements in pricing and mix.

Last year PSA burned through €200 billion in cash per month, but it aims to halve the outflow this year. The company ended 2012 with €7.3 billion in cash and €3.2 billion in untapped credit lines.

PSA, which sold €2 billion of assets last year, plans to shore up its finances this year by selling €200 million of real estate. The company reiterates it has no plans to sell any of its 57.4% stake in supplier Faurecia SA.

PSA also expanded upon its previously disclosed plans to return to profitability by 2015, saying it will:

Hike revenue by moving its Peugeot brand upscale, starting with new and revamped models arriving this year.

Expand overseas to reduce its reliance on Europe to half of its vehicle sales from 62% last year.

Boost its capacity utilization, which fell to 75% last year from 86% in 2011. A key step is closing its assembly plant in Aulnay, France, this year.

Cut capital spending by €550 million and save $600 million through cost-cutting actions.

Save €350 million from its purchasing and product development alliance with General Motors Co.