WOLFSBURG (dpa-AFX) - Volkswagen AG (VKW.L, VLKAF.PK, VOW.BE) reported that its profit attributable to shareholders for the first-quarter declined to 2.31 billion euros or 4.58 euros per ordinary share from 2.89 billion euros or 5.74 euros per ordinary share in the same quarter last year.
'2016 will be a transitional year for Volkswagen that will see us fundamentally realign the Group. Nevertheless, we remain confident that our operating business will again record solid growth this year. The Group's robust financial strength and earnings power are key to our ability to take the necessary decisions calmly and diligently, and to resolve the strategic policies that will shape our future with the necessary determination', said CEO Matthias Müller.
The Volkswagen Group reiterated its forecast for 2016 as a whole. Depending on economic conditions - particularly in South America and Russia - and exchange rate developments as well as against the backdrop of the diesel issue, the Board of Management expects 2016 sales revenue for the Volkswagen Group to be down by up to 5 percent on the prior-year figure. In terms of the Group's operating profit, it anticipates an operating return on sales of between 5.0 and 6.0 percent in 2016. In the Passenger Cars Business Area, the Volkswagen Group expects a marked decrease in sales revenue, with the operating return on sales probably in the 5.5 to 6.5 percent range. With sales revenue in the Commercial Vehicles Business Area remaining essentially unchanged, the Company anticipates an operating return on sales of between 2.0 and 4.0 percent. For the Financial Services Division, it is forecasts sales revenue and operating profit at the prior-year level.
The Group's first-quarter financial result declined by 0.9 billion euros overall to negative 0.2 billion euros, with negative effects from the remeasurement of financial derivatives offset by income from the sale of the shares in LeasePlan, which was completed in the first quarter.
Operating profit increased to 3.4 billion euros from last year's 3.3 billion euros, with the reported figure equating to an operating return on sales of 6.8 percent. First quarter operating profit contained overall positive special items of 0.3 billion euros, due among other things to currency-related adjustments to the provisions recognized in connection with the diesel issue.
Excluding the positive special items, operating profit would have decreased slightly to 3.1 billion euros. The operating return on sales before special items thus declined to 6.1 percent from 6.3 percent last year.
Quarterly group sales revenue was down 3.4 percent on the prior-year figure, at 51.0 billion euros. This slight decline was primarily attributable to the fall in vehicle unit sales and negative exchange rate effects.
The Group's sales revenue and operating profit did not include the operating activities of the Chinese joint ventures, which are accounted for using the equity method. The proportionate operating profit of the Chinese joint ventures amounted to 1.2 billion euros in the first three months.
The Volkswagen Passenger Cars brand recorded a year-on-year decline in volumes and sales revenue in the first three months of the current fiscal year. As a result, its operating profit before special items fell to 73 million euros from 514 million euros last year.
Copyright RTT News/dpa-AFX