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Business

VW manages profit despite 'extremely weak business'

Text by NEWS WIRES

Latest update : 2009-07-30

Europe's biggest carmaker Volkswagen is still making a profit despite the global crisis, posting a first half net profit of 494 million euros, but bosses cautiously said that "extremely weak business" this year would affect future earnings.

AFP - Germany's Volkswagen, the biggest European carmaker, said Thursday it was still making a profit despite the global crisis but was cautious about its future prospects.
   
VW posted a first half net profit of 494 million euros (695 million dollars), down a massive 81 percent from 2.57 billion euros in the same period a year earlier and below analyst forecasts of around 524 million euros.
   
Sales fell 9.4 percent in the six-month period to 51.2 billion euros, a statement added.
   
The group delivered a total of 3.1 vehicles, down five percent.
   
Business was "significantly affected by the global financial and economic crisis," the company said.
   
VW maintained its 2009 outlook but did not provide detailed figures, saying that "the high volatility of market developments does not permit any reliable forecasts to be made for the rest of fiscal year 2009.
   
"Based on the extremely weak business in the first six months of 2009, we continue to expect that our earnings will not reach the level of previous years."
   
Operating profit in the six months to June slumped 63.9 percent to 1.24 billion euros but VW nonetheless continued to fare better than many rivals amid the collapse of auto markets worldwide.
   
Deliveries in its core German, Chinese and Brazilian markets even surpassed the figures of a year earlier, it said.
   
In China, VW said it had successfully launched two models, the Passat Lingyu and a new version of its venerable Golf.
   
With the introduction of several new models that consume less fuel, "while the Volkswagen Group will be unable to escape the downward trend, we believe that it will perform better than the market as a whole and will be able to gain additional market share during the crisis," it said.
   
The group said it had boosted its cash reserves by 53.1 percent since the end of 2008 to 12.3 billion euros.
   
VW shares rose 3.86 percent to 251.01 euros in morning trade on the Frankfurt stock exchange, while the DAX index on which they are listed was 0.23 percent higher.
   
The company has just managed to ward off a takeover attempt by luxury sports car maker Porsche, its biggest shareholder, and is now working to integrate Porsche as its 10th brand, alongside the Audi, Bentley, Bugatti and Lamborghini marques.
   
 

Date created : 2009-07-30

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