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PSA Group profit jumps on pricing, Opel synergies

PARIS (Reuters) – French carmaker PSA Group (PEUP.PA) delivered a sharp increase in first-half profit, as new models and the integration of Opel-Vauxhall more than made up for weaker emerging-market sales.

Recurring operating income at the maker of Peugeot and Citroen cars rose 10.6% to 3.34 billion euros ($3.7 billion), lifting its operating margin to a new record of 8.7% in January-June.

“Our results are proving the sustainability of our performance despite the weakness of global markets,” Chief Financial Officer Philippe de Rovira told reporters on a call.

“These headwinds were more than compensated by our efficiency and continuous efforts to save costs,” he added.

The profit gain came despite a 12.8% drop in global sales announced earlier this month, as emerging markets weighed on PSA’s overseas business.

Revenue fell by a more modest 0.7% to 38.3 billion euros, as new models such as the Citroen C5 Aircross and a trio of commercial van launches helped to lift pricing.

Net income jumped 24% to 1.832 billion euros for the first half, according to the French carmaker, which acquired the Opel-Vauxhall business from General Motors (GM.N) in 2017.

Reporting by Laurence Frost and Gilles Guillaume; Editing by Sudip Kar-Gupta