Renault SA is sticking to a plan to list its Ampere electric vehicle and software unit in the first half of next year, undaunted by recent market jitters.
(Bloomberg) — Renault SA is sticking to a plan to list its Ampere electric vehicle and software unit in the first half of next year, undaunted by recent market jitters.
That period likely still is the “best window” for an IPO, Chief Financial Officer Thierry Pieton said Thursday. The company earlier reported third-quarter revenue that missed estimates. The shares fell as much as 6.6%.
Renault’s preparations come at a difficult time for the listings market, which had begun to splutter back to life before shaky IPO performances from chip designer Arm Holdings Plc and sandal maker Birkenstock Holding Plc. The Ampere listing has been postponed once already amid lower-than-expected demand for its flagship EV, the Megane E-Tech, aggressive price cuts by Tesla Inc. and competition by cheaper Chinese vehicles.
The carmaker has been busy resetting its troubled alliance with Japanese partner Nissan Motor Co. Completion of a rebalancing agreement with Nissan is still expected in the fourth quarter. Once that’s finalized, Renault is “free to sell” 28.4% of Nissan shares, Pieton said on a call with analysts.
The move will allow Renault to “optimally reallocate part of its capital,” Pieton said, adding that the stake sale will be closely coordinated with Nissan.
Renault is counting on the introduction of 17 new models between now and 2025 to boost market share and gain momentum in the EV transition. Renault’s third-quarter sales climbed 7.6% on better pricing and strong demand for new models such as the Austral sport utility vehicle, which sold roughly 21,000 times in the period.
The manufacturer said its order book in its main market Europe remains strong. Signs of the market softening, though, are growing, as buyers continue to grapple with high inflation that’s eroding purchasing power. Volkswagen AG said last week third-quarter EV orders fell short of its targets, forcing it to lay off temporary workers and cut shifts in German factories in recent weeks.
Renault in June upgraded its earnings forecast despite the softening market. The carmaker on Thursday reaffirmed its guidance for full-year operating margin of between 7% and 8% and automotive operational free cash flow of at least €2.5 billion.
Operating margin in the second part if the year will exceed that of the first half, which stood at 7.6%, Renault said.
As of Sept. 30, total inventories decreased to 542,000 vehicles, versus 569,000 units at the end of June. That’s in line with the objective of being below 500,000 vehicles at the end of the year, the company said.
(Updates with CFO comment in second paragraph.)
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