GERMANY: Truck unit sale keeps VW in black
The sale of the Brazilian commercial vehicle business for about EUR600m to MAN helped the Volkswagen Group post an operating profit for the first quarter of 2009 of EUR312m, down 76% from EUR1,311m a year ago.
Profit before tax was off 96% at EUR52m versus EUR 1,366m in 2008.
Group sales revenue dipped 11.2% to EUR 24.0bn or 17.1% excluding the contribution from truckmaker Scania.
Group unit sales fell 16% in the first three months, production has been cut by around a quarter and inventories reduced significantly as a result, VW said.
"The group, too, is not immune to the dramatic deterioration in the global business environment," said chairman Martin Winterkorn, announcing the results on Wednesday.
"The strengths of our multi-brand group prove themselves especially in difficult times: we have increased our global market share thanks to our young and environmentally friendly model range, and are in a sound financial position," said Winterkorn.
"Our goal for fiscal year 2009 remains to outperform the market as a whole and to gain additional market share."
Deliveries worldwide were down 10.7% year on year to 1.4m vehicles. Passenger car sales were 20.7% below the previous year. But deliveries rose in Germany, China, Brazil, Russia and Poland.
VW said the group's numerous new and low-consumption models would further extend its product range and cover new market segments.
"For this reason, although we assume that 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.
"Sales revenue in 2009 will be lower than in the previous year because of the decline in volume sales. Rising refinancing costs and a worsening of the country mix will serve as an additional drag on earnings.
"Volkswagen will counter this trend in particular through disciplined cost and investment management and the continuous optimization of its processes."
It added 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 three months of 2009, we continue to expect that our earnings will not reach the level of previous years."