VW posts 23% rise in Q2 profit as outlook dims

August 1, 2018 09:08 CET

WOLFSBURG — Volkswagen Group posted a 23 percent rise in underlying quarterly operating profit, even as difficulties conforming to a new WLTP anti-pollution rules in Europe cloud the sales outlook for passenger cars.

A 5.5 percent rise in vehicle sales helped the multibrand group to lift second-quarter operating profit before special items to 5.58 billion euros from 4.55 billion a year-earlier, VW said in a statement Wednesday.

The adjusted return on sales improved to 9.1 percent from 7.7 percent a year earlier.

After special items, which included 1.6 billion euros related to VW’s diesel emissions test cheating scandal, group operating profit dropped by 13 percent to 3.95 billion euros, with the return on sales shrinking to 6.5 from 7.7 percent.

Despite confirming its outlook for a full-year adjusted operating margin of between 6.5 percent and 7.5 percent, Volkswagen warned that sticking to its financial targets will be a challenge.

After special items, VW said it anticipates that its operating return on sales will fall “moderately short.”

“We cannot rest on our laurels because great challenges lie ahead of us in the coming quarters especially regarding the transition to the new WLTP test procedure. Growing protectionism also poses major challenges for the globally integrated automotive industry,” VW Group CEO Herbert Diess said in the statement.

Volkswagen is suffering bottlenecks as it rushes to get models through the so-called Worldwide Harmonized Light Duty Vehicles Test Procedure (WLTP) that comes into effect in the European Union on Sept. 1.

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