Volkswagen Group is widely expected to announce relatively good second quarter financial results this week (July 30) on the back of a global footprint that means it has been better placed to ride the recession than some of its European peers. However, the financial implications of its close relationship with Porsche will be closely studied in the coming weeks.


Sabine Blümel, an analyst with Creative Global Investments (LLC), told just-auto today that she expects the company to announce an EUR365m group operating profit (a 1.3% margin) – a figure that would be considerably better than the first quarter’s EUR313m that also included EUR600m capital gains.


“The VW group has been fairing comparatively better than its European peers, due to its global footprint, multi-brand approach and relatively low exposure to the US market,” she said.


“It is also the only German OEM that has benefited from the various European incentive programmes,” she adds.


Although there was a decline in overall vehicle deliveries in the second quarter, the trend is improving. Deliveries at the Chinese operations jumped 40% year-on-year in the second quarter.


She said she expects group pre- and after tax profit of EUR225m and EUR147m.


And Blümel also believes the firm will post a relatively healthy full-year result.


“We expect that the VW group will be the only European OEM to report a clearly positive full-year result,” she says.


One uncertainty is presented by the firm’s relationship with Porsche. The departure of Porsche’s CEO and CFO means that VW and Porsche have inched closer to integration, under VW leadership.


However, the structure of the future group will be negotiated over the next few weeks and some decisions are expected to be made at VW’s supervisory board meeting on August 13th.


Blümel says an ‘overriding goal’ for VW is to maintain its credit rating in view of Porsche’s EUR9bn debt.


One possible scenario is that Porsche, as announced, will raise EUR5bn new equity, funded by the controlling Porsche–Piëch families, and Qatar. VW would then take over Porsche in several steps, she says.