Renault reports weak earnings on Iran write off

PARIS (AP) — French carmaker Renault blamed a massive write off on the value of its operations in Iran for a steep drop in its first half earnings.

The maker of the Clio and Megane hatchbacks said Friday it took a 512-million-euro ($680-million) charge to write off the entire value of its Iran operations, which are threatened by international sanctions on the Islamic republic.

Along with other charges, including restructuring of factories in France, that left Renault's first-half earnings at only 39 million euros, down from 734 million euros a year earlier, the carmaker said in a statement Friday.

New car sales continued to fall as international growth couldn't offset poor markets in Europe, especially in France. Renault said a worsening in market conditions would put in doubt its full-year targets, including higher worldwide registrations.

Renault's business in Iran consists of assembling vehicle kits it sends there. Tougher U.S. sanctions on the Islamic regime that came into effect last month mean Renault cannot get its money out of Iran, leading to the charge against its second quarter earnings.

Earlier this month, the European automakers' association ACEA said car sales slumped 6.6 percent in the first half of the year amid signs of continued deep recession and high unemployment in Europe.

To cope with the dwindling market in Europe, automakers have announced factory closures and put off new car launches.

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Reports: Ad giants Omnicom, Publicis in talks

NEW YORK (AP) — Omnicom and Publicis are close to striking a deal that would combine the two advertising giants into the world's largest advertising firm, according to media reports.

Such a merger would create a firm with a market value of more than $30 billion, surpassing London-based industry leader WPP PLC. A combined firm would allow for more pricing power, though the decrease in competition could present regulatory hurdles in the U.S. and Europe. Client conflicts also could be an issue.

Omnicom Group Inc., based in New York, owns BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide, among other agencies. Paris-based Publicis Groupe SA runs its namesake agency as well as Leo Burnett Worldwide, Saatchi & Saatchi and DigitasLBi.

An announcement is expected Sunday at Publicis' headquarters.

Spokespeople for Omnicom and Publicis couldn't immediately be reached for comment on Saturday. Bloomberg News first reported the talks aftermarket on Friday, citing an unnamed person familiar with the deal.

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Reports: Ad giants Omnicom, Publicis in talks

NEW YORK (AP) — Omnicom and Publicis are close to striking a deal that would combine the two advertising giants into the world's largest advertising firm, according to media reports.

Such a merger would create a firm with a market value of more than $30 billion, surpassing London-based industry leader WPP PLC. A combined firm would allow for more pricing power, though the decrease in competition could present regulatory hurdles in the U.S. and Europe. Client conflicts also could be an issue.

Omnicom Group Inc., based in New York, owns BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide, among other agencies. Paris-based Publicis Groupe SA runs its namesake agency as well as Leo Burnett Worldwide, Saatchi & Saatchi and DigitasLBi.

An announcement is expected Sunday at Publicis' headquarters.

Spokespeople for Omnicom and Publicis couldn't immediately be reached for comment on Saturday. Bloomberg News first reported the talks aftermarket on Friday, citing an unnamed person familiar with the deal.

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Air France-KLM reports further losses in Q2

PARIS (AP) — Air France-KLM posted further losses in the second quarter as its medium-haul and cargo operations continued to suffer from the weak economy.

The Franco-Dutch airline said Friday it lost 163 million euros ($215 million) in the second quarter, compared with a 897-million-euro loss a year earlier, when accounts were hammered by the cost of a plan to shed about 10 percent of the carrier's workforce.

Air France-KLM said a planned turnaround in its medium-haul and cargo businesses "is taking longer than expected" and that "further measures" will be taken later this year, instead of in the fall as earlier scheduled.

Revenue stagnated in the second quarter as slightly higher passenger traffic was offset by lower revenue per passenger.

The joint airline is in the midst of a three-year turnaround plan and it hopes to strengthen its position by paying down debt and reducing staff costs.

Air France-KLM is struggling to compete against low-cost carriers and has said it expects to cut about 5,000 people in its workforce of 49,000. It said the plan is on track despite "the persistently touch economic environment."

The company forecast second half operating earnings would improve to around the same level seen in the first half, which would still see the airline suffering an operating loss of around 200 million euros.

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Renault reports weak earnings on Iran write off

PARIS (AP) — French carmaker Renault blamed a massive write off on the value of its operations in Iran for a steep drop in its first half earnings.

The maker of the Clio and Megane hatchbacks said Friday it took a 512-million-euro ($680-million) charge to write off the entire value of its Iran operations, which are threatened by international sanctions on the Islamic republic.

Along with other charges, including restructuring of factories in France, that left Renault's first-half earnings at only 39 million euros, down from 734 million euros a year earlier, the carmaker said in a statement Friday.

New car sales continued to fall as international growth couldn't offset poor markets in Europe, especially in France. Renault said a worsening in market conditions would put in doubt its full-year targets, including higher worldwide registrations.

Renault's business in Iran consists of assembling vehicle kits it sends there. Tougher U.S. sanctions on the Islamic regime that came into effect last month mean Renault cannot get its money out of Iran, leading to the charge against its second quarter earnings.

Earlier this month, the European automakers' association ACEA said car sales slumped 6.6 percent in the first half of the year amid signs of continued deep recession and high unemployment in Europe.

To cope with the dwindling market in Europe, automakers have announced factory closures and put off new car launches.

View the original article here