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PSA Peugeot Citroen says first half net profit rose 60 per cent

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PARIS (AP) _ French automaker PSA Peugeot-Citroen reported Wednesday that first-half earnings rose 60 per cent on rising demand, better pricing and the rollout of new models.

Europe's second-largest car maker after Volkswagen AG said it increased its share of the European market and expects continued improvement through 2007, led by demand for new models such as the Citroen C4 Picasso and the Peugeot 207 _ Europe's fastest selling car.

Peugeot-Citroen reported a first-half net profit of 492 million euros (US$680.58 million), up from 306 million euros a year earlier. First-half revenue rose 5.9 per cent to 30.82 billion euros ($42.63 billion).

Operating profit came in at 842 million euros ($1164.74 million), up from 691 million euros a year before. The operating margin was 2.7 per cent compared with 2.4 per cent in the first half of 2006.

The company did not break out separate second-quarter results.

The earnings beat analyst forecasts. A poll had forecast net profit of 323.8 million euros ($447.91 million) on sales of 30.35 billion euros ($41.98 billion).

Peugeot-Citroen's fortunes have ebbed in recent years as a weak product lineup and fierce competition from Asian manufacturers diminished its share of the European market to just over 13 per cent, from a record 16 per cent in 2002.

The company said Wednesday its share of the European market rose to 14.2 per cent from 14 per cent a year ago.

Operating income at its automobile division rose 76 per cent to 400 million euros ($553.32 million), boosting operating margin _ a closely watched indicator of the company's financial health _ to 1.7 per cent of sales from 0.8 per cent a year ago.

New CEO Christian Streiff _ who joined the company last year, detailed a major turnaround plan in May.

As part of its restructuring, Peugeot-Citroen has announced plans this year to reduce its work force in France by 4,800 employees.

Streiff ``strongly'' ruled out any link between added work pressures and a spate of suicides at the company's Mulhouse site. An employee hung himself earlier this month at his workplace, the fifth suicide among the 13,000 employees of the site since the start of the year.

Shares in the company fell 1.8 per cent to 64.40 euros ($89.02) in early trading Wednesday in Paris.

Peugeot-Citroen said sales in the second half will be slightly ahead of the year-earlier period thanks to the launch of new, higher-value models.

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PSA Peugeot Citroen says first half net profit rose 60 per cent
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