PARIS -- PSA Group said its profitability reached a record high in 2019 but the automaker forecast falling industry sales in Europe this year as it pursues its merger with Fiat Chrysler Automobiles.
Operating margin was a record 8.5 percent as the company lowered costs and sold more expensive models such as SUVs including the Citroen C5 Aircross.
Group revenue increased 1 percent to 74.7 billion euros ($81.2 billion) despite falling vehicle sales, PSA said in a statement on Wednesday.
Adjusted operating income rose 11 percent to 6.32 billion euros ($6.87 billion) and net profit increased 13.2 percent to 3.2 billion euros.
PSA increased its 2019 dividend to 1.23 euros per share, up 58 percent from 2018 levels.
PSA's global vehicle sales fell 10 percent last year to 3.49 million units.
The carmaker was "once again very solid," analysts at brokerage Oddo-BHF said in a note, adding the results confirmed the company's "best-in-class status."
PSA kept a target for the 2019-2021 average automotive adjusted operating margin of more than 4.5 percent, a level Chief Financial Officer Philippe de Rovira called a "floor" and very conservative.
"Our internal target is always to improve performance, so let's not be misled by this indicator," he said on a call with reporters on Wednesday.
PSA CEO Carlos Tavares has turned around the automaker by focusing relentlessly on cutting out overhead and adding scale since he arrived from Renault in 2014.
The automaker has trimmed costs in areas such as purchasing as it integrated its acquisition of Opel and Vauxhall. Last month PSA unveiled job reductions at Opel.
Opel/Vauxhall had 6.5 percent operating margin last year, PSA said. The Germany-based subsidiary increased its operating profit to 1.1 billion euros from 859 million euros in 2018.