France's Peugeot narrows first half loss, shares soar

Struggling French carmaker PSA Peugeot Citroen said Wednesday it narrowed its losses by almost half in the first six months of 2013, sending shares up over 7 percent as investors welcomed the news. The carmaker lost 426 million euros ($566 million) in the first half of the year, narrowing its deficit to about half the 818 million euros in losses during the same period last year. Sales were down 3.8 percent at 27.7 billion euros, amid sluggish demand in the European market. In a statement, the group said it had "made headway" in a restructuring drive and in efforts to save money "despite a European market down by 7 percent". "We are seeing the first signs of recovery," Philippe Varin, chairman of the board, told analysts. Media had speculated that the embattled group would have to seek a capital increase to fight against a general drop in car sales, but Varin said Wednesday this "was not on the agenda for the moment". A year ago, PSA launched a series of measures to try and improve the situation, with more than 11,200 job cuts in France between May 2012 and May 2014. It also decided to close the Aulnay-sous-Bois factory near Paris, provoking a huge outcry among workers and unions. "By the end of December, we think that 3,500 people will have left the firm," Varin said.