· PSA Group's net income in 2016 doubled this year, or increased by 5% in China

According to foreign media reports, Peugeot Citroen Automobile Group (PSA) recently announced its 2016 financial report. According to reports, 2016 is the first time in six years that PSA Group has provided dividends to shareholders. In addition, PSA also raised its mid-term profit target with almost doubled net income.

PSA said that due to pricing strategy, higher sales of higher-end products and lower costs, its gross profit of 2016 auto business rose to 6% compared with 2015, setting a new record. Last year, PSA's net income almost doubled, rising 92% from 2015's 899 million euros to 1.73 billion euros. Recurring operating income climbed 18% to 3.235 billion euros, exceeding media expectations of the previous 13 analysts of 3.14 billion euros. Revenue was 54 billion euros, down 1.1% from the previous year, but it also exceeded expectations of 53.7 billion euros.

Among them, the new product offensive and favorable price strategy at the beginning of the year contributed Ps 365 million in revenue to PSA throughout the year. Cost reductions in areas such as procurement, production and overhead also contributed 863 million euros.

Peugeot Citroé¾™n's operating profit returned to 2014 levels after three years of losses, and then under the leadership of its CEO, Carlos Tavares, PSA once again achieved a dividend. Based on 2016 revenue, PSA recommended a dividend of 0.48 euros per share to shareholders this year, the first PSA dividend since 2011.

In addition, PSA raised its average operating gross profit target for the period 2016-2018 to 4.5%, but did not mention anything about GM's purchase of Opel.

On February 14th, local time, PSA and General Motors confirmed that the two sides are negotiating about PSA's purchase of Opel. Once the deal is reached, the PSA Group will become the second largest automaker in Europe outside the public. According to Reuters local time on February 22, PSA estimates that once the successful purchase of Opel, PSA Group's sales will reach 5 million by 2020 to 2022, which will save the cost of 1.5 billion to 2 billion euros.

PSA Chief Financial Officer Jean-Baptiste de Chatillon said the net cash of 6.8 billion euros allowed the company to make a profitable investment. However, he said that it is still not clear the outcome of the Opel issue.

In terms of sales volume, PSA predicts that demand in Europe, Latin America and Russia will be stable this year, and sales in the Chinese market are expected to increase by another 5%.

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