VW says a recovery to the VW brand in the second quarter helped to lift operating profitability in the first half

VW says a recovery to the VW brand in the second quarter helped to lift operating profitability in the first half

Volkswagen Group says it has set aside another EUR2.2bn in the first six months of the year in relation to costs arising from its 'dieselgate' emissions scandal.

However, the company also said in an 'ad hoc statement' today that the operating result before special items is "significantly higher than market expectations for the first half of 2016". Analysts cheered the result and VW's share price rose today. The company said the result was lifted by improved performance for the VW brand in the second quarter, although it is still facing a revenue decline this year.

The VW Group operating result before special items for the first six months is EUR7.5bn.

The company said that special items, totalling a negative EUR2.2bn, mainly related to further legal risks predominately arising in North America, have been included in the first half year results. The operating result after special items amounted to EUR5.3bn.

The company said that the favourable result before special items reflected, in particular, "improvements in the result of the Volkswagen brand in the second quarter, especially in comparison to the weak first three months". Causal factors, VW said, include demand seasonality, the improved car market in Europe, as well as the "return of orders from large corporate fleets that we had forecasted". Positive impacts from the efficiency programme also contributed, VW said.

Outlook is for 2016 revenue dip

VW said it continues to anticipate that, depending on the economic conditions – particularly in South America and Russia – and the exchange rate development and in light of the diesel issue, it expects 2016 sales revenue for the Volkswagen Group to be down by as much as 5% on the prior-year figure.

Full first-half results for VW Group will be released on 28 July.