How do they dare to put out good news?
VW posts higher profit, record deliveries
The Associated Press
Monday, March 02, 2009
FRANKFURT — German car maker Volkswagen AG said Monday its 2008 net profit rose 15.4 per cent on record deliveries, but said the global economic crisis meant that 2009 earnings would not hit the same levels.
Wolfsburg-based Volkswagen said net profit for the full year rose to €4.8-billion ($6.4-billion U.S.) from €4.1-billion in 2007. Sales were 4.5 per cent higher, climbing to €114-billion from €109-billion.
The company, whose brands include Volkswagen, Audi, Seat, Skoda and Bentley, did not report fourth quarter figures. Its full earnings report is due on March 12.
VW said the company delivered 6.3 million cars worldwide in 2008, a 1.1 per cent increase over 2007 and a new record. It said annual operating profit was up 3 per cent, to €6.3-billion from €6.2-billion.
However, the view ahead was less rosy.
Volkswagen said that “the high volatility of market developments does not currently permit any reliable forecasts to be made for fiscal year 2009.”
“Based on the extremely weak business at the beginning of the year, earnings will not reach the high levels of previous years,” it added in a statement.
Sales will be lower in 2009, while “rising refinancing costs and a worsening in the country mix will serve as an additional drag on earnings,” it warned.
Volkswagen has said that January group sales fell more than 21 per cent to 382,000 vehicles from 485,300 a year earlier.
While it will be “unable to escape the downward trend,” Volkswagen said that, thanks to new models, “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.”
There was another bright spot amid the gloomy outlook. VW recently said a newly introduced German government plan that offers a €2,500 bonus to people who scrap aging cars and buy new ones has given a strong boost to sales.
Other countries also have enacted auto sales stimulus plans.
VW shares closed down 0.5 per cent at €187.15 each after the earnings report, which beat analysts' expectations.
The results exceeded the expectations of 26 analysts surveyed by Thomson Reuters who forecast full-year VW net profit at €4.4-billion. Twenty-nine analysts put full-year sales at €112-billion.
Tim Urquhart, an analyst at IHS Global Insight in London, said he thinks VW is in a better position than most of its competitors, especially with its strong product portfolio.
Despite recent sales declines, market shares have risen. He said VW has also made strong progress in emerging markets like China and South America, even while the over-all market has experienced a “global collapse.”
“They're the best compared with their competitors,” Mr. Urquhart said.
Stuttgart-based Porsche Automobil Holding SE is VW's largest shareholder, with a 51 per cent stake — a holding that it intends to increase to 75 per cent.
Porsche said earlier Monday that its August-January sales were 12.8 per cent lower than a year earlier. Porsche shares ended down 0.1 per cent at €32.60 each in Frankfurt.
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