Volkswagen's profits fall almost 46%

BERLIN, GERMANY: Volkswagen, Europe's biggest car manufacturer, said on Tuesday (30 July) it's first-half net profit plunged nearly 46% because of difficulties in the European market. The company maintained its full-year forecasts.

The group, which manufactures the Seat, Audi and Bentley models, said net profit came to €4.8bn for the first six months of the year, a 45.8% drop from the same period a year earlier.

The fall follows one-offs linked to its tie-up with luxury sports-car manufacturer Porsche that helped boost last year's first-half results. This was exacerbated by other financial provisions by Volkswagen.

However, the figure slightly exceeded forecasts by analysts polled by Dow Jones Newswires who had predicted a net profit of €4.62bn.

First-half sales grew by 3.5% to €98.7bn, while operating or underlying profit fell 11.6% to €5.8bn.

Despite the challenging market environment, the group was upbeat at its full-year prospects.

"We expect the Volkswagen group's sales revenue to exceed last year's figure," a company statement said without being more specific.

"Given the ongoing uncertainty in the economic environment, the group's goal for operating profit is to match those of last year," the statement added.

For the current year, Volkswagen expects to "outperform the market as a whole" and to boost deliveries. It reported that 4.8m vehicles had been delivered, 5.4% more than last year.

Source: AFP via I-Net Bridge