A logo is pictured on the Peugeot food truck, named Le Bistrot du Lion, during a press presentation in Paris April 2, 2015. REUTERS/Benoit Tessier

PARIS (Reuters) - PSA Peugeot Citroen posted positive first-half net income on Wednesday for the first time in four years, meeting most of its recovery goals early while warning that it faced tougher market conditions in the rest of the year.

Paris-based Peugeot recorded net income of 571 million euros (404 million pounds) for January-June, after a 114 million euro loss a year earlier, the company said in a statement. Revenue rose 6.9 percent to 28.9 billion euros.

Core manufacturing earnings surged to 975 million euros, lifting the divisional operating margin to 5 percent, a level not seen for more than a decade, according to the company.

Operating free cash flow rose by two-thirds to 2.792 billion euros for the period, Peugeot said.

The company nonetheless stuck to medium-term recovery goals it has already surpassed in the first half, including a 2 percent auto division margin and 2 billion euros of cumulative cash flow by 2018.

A weaker euro, falling raw material costs and other seasonal tailwinds accounted for about one-third of the operating income of 1.08 billion euros, Chief Financial Officer Jean-Baptiste de Chatillon said, adding that conditions would get tougher.

Challenges include the slowing of demand in China, he told reporters, where the company now sees full-year market growth of just 3 percent.

(Reporting by Laurence Frost; Editing by James Regan)