Volkswagen Group’s first half operating result before special items fell to a loss of EUR 0.8bn compared with a EUR10bn profit a year ago.
Group sales revenue fell 23.2% to EUR 96.1bn and deliveries were down 27.4% to 3.9m vehicles.
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The automaker noted the month of month decline had been reducing each month since May.
Net liquidity in the automotive division rose compared with the first quarter by EUR 0.9bn to EUR 18.7bn after a successful placement of hybrid notes strengthened the capital base.
The before tax loss was EUR1.4bn compared with a EUR9.6bn gain a year ago.
“Business at the group and its brands was strongly affected by the COVID-19 pandemic in the first half of 2020,” VW said in a statement.
“Countermeasures initiated at an early stage to reduce costs and safeguard liquidity were successful and therefore reduced the effects of the crisis.
“Due to production consistently oriented toward customer demand, the group achieved stringent inventory management and thus a significant decrease in funds tied up in working capital.”
Finance and IT chief Frank Witter said: “The first half of 2020 was one of the most challenging in the history of our company due to the COVID-19 pandemic.
“Thanks to the great team effort, we have gradually been able to ramp up operations and, up until now, have steadily managed to navigate through this unprecedented crisis. Due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models, we look cautiously optimistic to the second half of the year.”
VW noted recovery in western Europe where May deliveries were around 57% lower year-on-year, in June the figure was 30% and recovery continued in July.
The group expects July deliveries in this month to be below the July 2019 tally but only by a single digit percentage. The markets are expected to continue to recover overall in the second half of the year.
Looking ahead, the group anticipates deliveries will be significantly down on the previous year in 2020 due to the impact of the COVID-19 pandemic. Challenges will also arise particularly from the increasing intensity of competition, volatile commodity and foreign exchange markets and more stringent emissions-related requirements.
Sales revenue is expected to fall significantly and the operating result for 2020 before and including special items will be severely lower than in previous year though positive.
Expenditures for research and development (R&D) as well as capex will be significantly lower overall than in 2019.
The Volkswagen Passenger Cars brand sold 1.1m (versus 1.9m in H1 2019) in H1 2020, down 39.8%. Sales revenue decreased 35.3% to EUR 28.6bn. Operating loss before special items was EUR1.5bn (+2.3bn).
Lower fixed costs and better price positioning were unable to compensate for the impact of lower volumes due to the COVID-19 pandemic.
The diesel issue gave rise to special items of EUR–0.6bn (–0.4bn).
