Volkswagen AG net income fell 29 percent last year to 716 million euros ($929 million) from a revised 1 billion euros in 2003 Volkswagen said today in a statement to the Frankfurt exchange, according to Bloomberg.
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The company suffered from the effects of the weak dollar, slower sales in the US and China, as well as poor demand in Germany.
Despite the dip in profit, the company said it had met its target for operating earnings and would keep its dividend unchanged at 1.05 euros ($1.31) per ordinary share, according to AP.
Operating earnings fell 12 percent to 2.0 billion euros ($2.5 billion) from 2.3 billion euros, but exceeded the company’s forecast of 1.9 billion euros ($2.4 billion).
The weakening dollar squeezed Volkswagen’s profit margins in the US market last year, where the company also faces fierce price competition. Late model cycles also acted as a drag on the company’s US sales.
The markets nevertheless welcomed Volkswagen’s apparently poor results, with the VW share price seeing early gains on the Frankfurt exchange.
“We believe in their cost cutting and the turnaround story,” said Eric Raets, a fund manager at KBC Bank in Brussels, quoted by Bloomberg. “They cut their auto investment and we really wanted to see that.”
