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Renault reports 7.8m loss

NEWS STORY
11/09/2019

In its efforts to catch Mercedes, Ferrari and Red Bull, Renault turned a 1 pre-tax profit into a 7.8m loss in 2018.

The Oxfordshire-based French team saw its costs increase by 18.6m to 152.3m in the year to 31 December (2018), while revenue rose by just 7.6%.

Driving the increased spending was a recruitment drive which saw 70 new staff recruited - bringing the total to 676 - as well as 9.9m spent on such things as improving its Enstone HQ.

Renault returned to F1 in 2016, just five years after quitting due to the infamous Crash-gate saga, which saw Nelson Piquet deliberately crash during the Singapore Grand Prix in a bid to aid teammate Fernando Alonso.

The operation was sold to investment firm Genii and rebranded as Lotus. However, the Genii operation subsequently ran into financial difficulty and eventually Renault bought the team back for 1.

As previously reported, the French manufacturer was tempted back to the sport by a deal brokered by Bernie Ecclestone.

At the time, the private equity firm CVC owned F1 and was in talks with Liberty about buying the sport. Investment bank Goldman Sachs had been appointed to advise on the sale, and it was thought that having Renault back on board would be a good move, for, if nothing else, it prevented the sport losing another team.

As an incentive to Renault to sign on the dotted line, Ecclestone put a clause in its Team Agreement promising a bonus of $22m should it win back-to-back titles, and at least 22 races in the process.

While the French team has yet to even score a podium finish since its returns, finishing ninth in the team standings in its 'debut' season, the Enstone-based outfit rose to 7th in 2017 and 4th last year.

Last weekend, at Monza, Daniel Ricciardo and Nico Hulkenberg finished fourth and fifth, the French team's best result since its return to the grid.

Talking of Ricciardo, the Australian, who is understood to be on an annual salary of around 22m, this will drive up the team's spending even further, little wonder therefore that parent company loaned the team 13.6m last year, bring the total debt to the French car manufacturer to 109.9m and giving it net liabilities of 41m.

According to the Evening Standard, the company could be hit should Brexit ever be sorted and the UK leaves the European Union, the accounts warning that it "continues to monitor Brexit developments and to put plans in place for different scenarios, including whether the impact can be partially mitigated by utilising the operations the group has within the European Union".

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1. Posted by Simon in Adelaide, 13/09/2019 1:50

"Most of that cost will have been in Aussie dollars :)"

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