Volkswagen sees ‘severe’ virus impact but no annual loss ahead

Agence France-Presse
Volkswagen sees ‘severe’ virus impact but no annual loss ahead

AFP

Net profit at the sprawling 12-brand Volkswagen Group falls 83% to 517 million euros ($561 million) in the 1st quarter of 2020

FRANKFURT AM MAIN, Germany – German car giant Volkswagen said on Wednesday, April 29, it expects to defy the impact of the coronavirus pandemic with a small operating profit in 2020, although the figure will be “severely” impacted.

The company withdrew existing full-year targets earlier this month as it released grim preliminary earnings data for January-March.

With unit sales and revenue forecast “significantly below” 2019 levels, VW “expects operating profit for 2020 to be severely below the prior year, but still to remain positive,” it said in a statement unveiling full 1st quarter results.

In final 1st quarter figures released on Monday, April 27, net profit at the sprawling 12-brand group fell 83% year-on-year, to 517 million euros ($561 million).

Meanwhile VW’s revenues fell just over 8% to 55 billion euros.

“We’ve taken numerous countermeasures to cut costs and ensure liquidity and we continue to be robustly positioned financially,” finance director Frank Witter said in a statement.

On March 31, VW was holding 17.8 billion euros in cash.

Across Europe’s major markets, car sales plummeted in March as lockdown measures imposed to slow the coronavirus’ spread wiped out swathes of everyday economic activity.

But there are glimmers of hope for VW in home market Germany, where dealerships have reopened and factories are restarting production at a slower pace.

Nevertheless, analysts at credit ratings agency Moody’s expect a 14% drop in the global car market this year. – Rappler.com

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