Peugeot Citroen reveals $1.4bn loss

PSA Peugeot Citroen, French carmaker, has reported a $1.4n loss in the first half of the year, as the global recession continues to affect the industry. The company, which had made a $733m profit a year earlier, said it does not expect the market to recover until the end of 2010.

Philippe Varin, Peugeot Citroen's chief executive, said the results "reflect the bad conditions in the European market which have only been partly offset by efficiency gains and the launch of new models".

The company, whose cars include the Peugeot 207 and Citroen's C4 Picasso, said first-half sales for 2009 were down 21.8 per cent. Despite the reported loss, shares in the carmaker jumped on Wednesday, as efforts to improve the company's cash appeared to have paid off. Peugeot Citroen cut its inventory by 31 per cent in the first six months of the year, and reduced its debt from $4bn to $2.8bn.

The company maintained its forecast for a 12 per cent drop in the European car market for 2009, with "the beginning of a recovery seen towards the end of 2010". Peugeot Citroen also reiterated that it expects to record a recurring operating loss this year of between $1.4bn and $2.8bn.