Renault profits plunge after Iran write-off

Renault's boss says the firm is on track

French carmaker Renault has reported a huge fall in profits for the first half of 2013 after writing off the entire value of its business in Iran.

Net income for the six months to June fell 87% to 97m euros ($129m; £83.7m), down from 774m euros a year earlier, a statement said.

The firm took a 512m-euro charge after halting its activities in Iran because of international sanctions imposed over the country's nuclear programme.

Weak European demand added to its woes.

Renault said continued international growth was not sufficient to offset falling sales in Europe, where tough economic conditions and high unemployment are continuing to depress the market.

The company admitted that it was facing a "tougher environment than expected", but pointed out that operating profit before one-off expenses had risen 15% to 583m euros.

"We are on track to achieve the objectives we announced for 2013," said chief executive Carlos Ghosn.

Renault has no manufacturing plants in Iran, but assembles vehicles there from kits of parts made elsewhere. Last month, US-led sanctions were toughened, making it impossible for Renault to repatriate its earnings.