Nanterre, France - Automotive supplier Faurecia Industries has posted a net loss of €48.2 million ($60.9 million) for the first half of this year compared to a net profit of €34.5 million the same time last year.
The company claimed the setback was due to a 10.7 percent drop in business with French carmakers, which accounted for 40 percent of Faurecia's consolidated sales, as well as higher raw material and energy costs.
Cashflows also suffered a 30.3 percent decline to €203.9 million, from €292.7 million last year.
''The factors that impacted the first half of 2006 will continue to weigh on the group's results until year end,'' a company statement said.
The results follow an announcement that 232 workers at the company's Henin-Beaumont plant in northern France - almost a third of the workforce - were going to be laid off during 2007 and 2008.
A Faurecia statement claimed the facility ''has seen a continuous deterioration in its results since 2004'' and redundancies were necessary ''in order to ensure the long-term future of the plant by restoring competitiveness and improving operational performance''.
The company's overall consolidated sales, however, rose by 6.5 percent to €5979.6 million in the first six months of 2006 compared to the same period last year, on the back of sustained growth outside Europe.
Sales grew by 20 percent in North America and 41 percent in Asia while Faurecia plans to have 15 new plants open outside western Europe by the end of the year - seven in the US, two in China and South Korea and four in eastern Europe.
Sales in its automotive seating division fell by 2.5 percent to €2480.4 million in the first half of 2006, partly due to an 18.4 percent drop in sales to French automakers.
Vehicle interiors sales, however, rose by 2.8 percent to €1791.4 million, with strong growth in Europe, China and a 21 percent boost in North America.