Volkswagen posted higher quarterly profit on a European car recovery and strengthening of cost cuts, but lowered its forecast for global sales amid a slowdown in China and the challenging markets in Russia and South America.
Deliveries throughout the year may be flat at 10.1 million record sales last year, VW said, after previously guided to a "moderate" increase.
"We are keeping a close eye on global macroeconomic trends, especially when there are uncertainties, such as the Chinese, Brazilian and Russian markets," said VW CEO Winterkorn said in a statement.
VW said today that its operating profit in the second quarter rose 4.9 percent to 3.49 million euros ($ 3.85 billion) from € 3.33 billion a year earlier.
The operating return on sales decreased to 6.2 percent from 6.5 percent. VW kept its outlook for profit and revenue, saying operating margin can be 5.5 percent to 6.5 percent for the year, after 6.3 percent last year.
Annual income can increase by up to 4 percent from € 202.5 billion in 2014, VW said. Its revenues for the second quarter increased more than expected 10 percent to 56 million euros, benefiting from the weak euro and other seasonal tailwinds.
Vehicle sales six months fell 0.5 percent to 5.04 million, reflecting a more rapid reduction in China although it was just enough to overtake Toyota as a manufacturer of world's largest automaker.
"The difficult market situation and fierce competition, and volatility of interest rate and exchange rate fluctuations and commodity prices present challenges," said VW finance chief Hans Dieter Poetsch.
Boost earnings of Porsche, Audi
Luxury brands VW remained major contributors to Group revenues in the first half.
Audi's operating profit rose 7.4 percent to 2.9 million, and profit of Porsche rose 21 percent to 1.7 billion euros, boosted by the new Macan compact SUV. The two brands accounted for over two thirds of VW's profits in the first six months of the year.
VW namesake brand improved its profit margin in the first half to 2.7 percent of sales 2.1 percent, helped by the positive effects of efficiency programs of the unit. However, what it is far more objective than 6 percent of sales in 2018.
Second set of upbeat quarterly results from a leadership dispute in April forced the resignation VW patriarch Ferdinand Piech contrasts with a power vacuum at the top of the group is looking for a new president and the modernization of the structure of the company .
VW rigid structure has made it slow to adapt to trends such as the arrival of the SUV. Winterkorn said he would present his plan for more efficient management in late September.
Post a comment
Hello guest, care to post a comment?