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PARIS, July 23 (Reuters) - French car-part maker Faurecia posted a rise in first-half profit on Wednesday thanks to cost cuts and strong sales of its car seats.
Faurecia, 70-percent owned by carmaker PSA Peugeot Citroen , said in a statement net profit rose to 16.2 million euros from 0.6 million in the year-earlier period, while operating income rose 25 percent to 161.3 million euros.
Sales at Europe's third-largest car part maker by sales rose 5.7 percent to 5.242 billion euros from 4.958 billion as carmakers rolled out eye-catching new models to boost demand and grab more market share.
Faurecia's operating profit as a percentage of sales rose to 3.1 percent from 2.6 percent a year, meaning the firm was on target to swell the key profitability measure quarter on quarter.
Faurecia, which slid to a net loss in 2002 as bad deals hurt profitability and restructuring costs stung, said it expected European car production to slow by around seven percent in the second half of 2003 and reiterated it aimed to outperform the market.
"In this difficult environment, Faurecia's business should continue to perform better than the market," the company said in a statement.
Earnings before interest, taxes, depreciation and amortisation rose 9.4 percent at 328.4 million euros.
Sales rose at all of Faurecia's divisions except exhaust systems, where the company said the weak dollar resulted in a 13.6 percent drop in revenues. Part of the decline was also due to a fall in the price of precious metals used in catalytic converters.
Suppliers such as Faurecia have felt the pinch in recent years as carmakers struggling with waning demand refuse to pay top dollar for their products.
Markets have speculated in recent months that Faurecia's parent firm PSA could sell its 71.5 percent stake in the car-part firm soon, but PSA has said the while it expects eventually to cut its holding to 51 percent it had no current plans for the stake.
PSA and its French rival Renault both post first-half results on Thursday, as does Europe's biggest publicly traded car-part maker Valeo .