Renault reported a 42% surge in first-half net profit to €705 million, yet the stock slipped after the release, closing at €27.97 as investors looked past the headline number to the quality of earnings underneath.
The profit jump was heavily flattered by tax gains and the absence of last year's €9.3 billion one-time loss on the Nissan stake. Stripping out that distortion, adjusted net income rose from €461 million a year earlier to €705 million, a 53% increase that still leaves the core business leaner but not dramatically transformed.
Group revenue climbed 9.5% to €30.3 billion, or 10.3% at constant exchange rates, driven by a 9.3% rise in automotive sales to €26.8 billion and an 11% jump at Mobilize Financial Services to €3.4 billion. Yet the group operating margin contracted to 5.2% of revenue from 6% a year ago, with the automotive segment margin falling to 3.0% from 3.6% as adverse currency effects, a richer model mix, and higher regulatory costs ate into profitability.
Free cash flow in the automotive division reached €653 million, helped by a €250 million dividend from the finance arm, up from €150 million in H1 2025. The automotive net cash position stood at €6.6 billion at end-June, providing a solid buffer. Still, the market's focus settled on the margin compression and the reliance on non-recurring tax benefits to deliver the headline profit beat.