VW's half-year results “healthy”
The Volkswagen Group finished H1 2016 in much better shape than anticipated. At the presentation of its half-yearly results, the Group said operating profit came to €7.5 billion, €500 million more than for the first half of last year. However, negative special items – mainly to do with legal risks resulting from Dieselgate - reduced operating profit by €2.2 billion to €5.3 billion. At €107.9 billion, the Group's sales revenue in the first six months fell slightly short of the prior-year figure (€108.8 billion).
The positive results for the first half-year were based on more than just the prolonged positive growth for the Audi, Porsche and Škoda brands; they also resulted from a palpable improvement in the Volkswagen Passenger Car brand during the second quarter compared with the first three months of the year.
"We produced a solid result in difficult conditions," said Frank Witter, the Group's Chief Financial Officer. "This shows that the Volkswagen Group has high earnings power. But it will require continued hard work to absorb the significant impact from the diesel issue."
Operating profit before special items of the Volkswagen Passenger Car brand declined to €0.9 billion (from €1.4 billion). This was attributed to exchange rate and mix effects in addition to lower sales volumes and higher marketing costs resulting from the emissions issue.
Audi generated an operating profit before special items of €2.7 billion, down from €2.9 billion. Škoda's operating profit improved by 31.2% to €685 million. The SEAT brand lifted its operating profit by €40 million to €93 million. Bentley saw its operating profit slide by €75 million to –€22 million. Porsche's operating profit improved by 7.7% to €1.8 billion.
At Volkswagen Commercial Vehicles, the Caddy and Multivan/Transporter models were very popular in the first six months of the year. Operating profit in the first half-year rose to €299 million, up from €268 million. Volkswagen Financial Services increased its operating profit by 2.6% to EUR €995 million. The number of new contracts rose worldwide by 15.2% year-on-year to 3.3 million.
Based on the economic outlook and continuing effects of the 'diesel issue', VW Group expects sales revenue in 2016 to be down by as much as 5%. "We will work hard on our earnings power to manage the future investments needed to transform our core automotive business and build an innovative business unit for mobility services. One pillar of Strategy 2025 is therefore that all brands and business areas contribute to increasing efficiency at every link in the value chain", said VW Group CEO Matthias Müller (pictured).
Image: Volkswagen Group
