Volkswagen has beaten forecasts with a near 50% rise in adjusted second-quarter operating profit helped by a recovery in its core VW brand.
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According to Reuters, the group said on Thursday that the VW Brand Group quarterly profit finally overtook those of its Audi Brand Group premium division, in the past the biggest contributor to earnings by far.
Excluding EUR906m in one-off restructuring charges, group operating profit rose by almost half to EUR1.30bn euros ($US1.64bn), exceeding the median estimate of 1.03bn from 20 analysts Reuters polled.
Driven by a one-off disposal gain of about EUR800m from the sales of its Europcar rental agency, Volkswagen’s net profit soared to EUR859m from EUR333m a year ago, the report said.
VW stuck to its forecast for an unspecified gain in operating profit before special items and also stuck to its mid-term pre-tax profit target of EUR5.1bn in 2008, Reuters added.
During a conference call with analysts and reporters, chief executive Bernd Pischetsrieder said about 2,500 workers had signed voluntary termination packages while a further 6,000 had signed early retirement contracts, but still work at the company, with another 3,700 already in a so-called passive phase of early retirement in which they no longer work at Volkswagen.
Despite the hefty EUR1.3bn charges to pay for the cuts, VW would not rule out further such costs in the second half, Reuters noted.
According to the report, management said rising raw material prices hit first-half operating profit by less than EUR100m.
Morgan Stanley reportedly wrote in a note that VW was making strides in ensuring the credibility of its 2008 operating targets, adding that VW’s operating margin had “smashed” its own estimate.
