Paris - AFP
French auto group PSA Peugeot Citroen reported a first-half net profit rise of 5.0 percent on Wednesday but its outlook for the year disappointed the market and the shares fell by 6.14 percent to 27.69 euros. Net profit for the first half rose to 806 million euros ($1.17 billion) and current operating profit by 1.8 percent to 1.16 billion euros. The group, which sold slightly more than 1.8 million vehicles in the first half, said that sales had risen by 9.7 percent to 31.1 billion euros. Disruption caused by earthquake damage in Japan had hit the global auto industry and the negative effect for the group amounted to 147 million euros. Finance director Frederic Saint-Geours said a further impact of 100 million euros was expected in the second half owing to problems with the supply of parts. The group also suffered from a rise in raw materials costs, which represented an extra charge of 366 million euros in the first half. \"We estimate the negative repercussion of raw materials for the whole year at 700 million euros,\" Saint-Geours said. The group is the biggest car maker in France and the second-biggest in Europe after Volkswagen of Germany. In the first half it made 38 percent of it sales outside Europe compared with 33.0 percent 12 months ago. Sales in China rose where its second joint venture has just been approved by the authorities. It has not yet chosen the site where it will set up production in India. The group maintained its forecasts for the year, counting on an increase in current operating profit. It expected the market in Europe to be stable despite the ending of government subsidy schemes for new cars when old cars were scrapped.