Volkswagen Group reports 9.8 billion Euro operating profit, up 9.8% in H1 CY2018

Volkswagen Group, the German multinational automotive manufacturing company has reported record deliveries, revenue and earnings (before special items) for the period January-June 2018. The group revenues for the period came at 119.4 billion euro (Rs 912,693 crore), up 3.56 percent compared to same period last year.

For the first half of the year the Group’s operating profit before special items was 9.8 billion euro (Rs 74,911 crore), up 9.8 percent YoY, while the company reported expenditures of 1.6 billion euro (Rs 12,230 crore) in connection with the diesel crisis, which was recognised in the second quarter.

Globally, the Volkswagen Group delivered 5.5 million vehicles to customers in the first half of 2018, an increase of 7.1 percent compared with the prior-year period.

The Volkswagen Group performed successfully in the first half of the year, with a solid growth in sales revenue and earnings. We also delivered more vehicles than ever before. However, we cannot rest on our laurels because great challenges lie ahead of us in the coming quarters – especially regarding the transition to the new WLTP test procedure. Growing protectionism also poses major challenges for the globally integrated automotive industry.” said Dr Herbert Diess, CEO of Volkswagen AG, commenting on the results for the first six months.

“The growth demonstrates that the many new models rolled out by our Group brands win customers over completely. Over the coming months, we will do everything in our power to validate the trust of our customers worldwide. Our stated goal is to transform Volkswagen into our industry’s leading company in terms of profitability, innovative power, sustainability and customer satisfaction,” added Dr Diess.

Despite anticipated expenditures arising from the transition to the new WLTP (Worldwide Harmonised Light-Duty Vehicles Test Procedure), the achievement of CO2 fleet targets and the rollout of the electric campaign, the Group says it stands by its outlook – before special items – for the current year. The Group forecasts that its sales revenue will be up to five percent higher than the prior-year figure, with an operating return on sales (before special items) of between 6.5 and 7.5 percent.

“The first half of the year showed that the Group has a solid operating and financial base,” said Frank Witter, member of the Group Board of Management, responsible for Finance and IT. “However, as communicated several times before, we need to prepare a volatile second half of the year, particularly due to the WLTP.”