Volkswagen cuts 2004 profit expectations
23 July 2004, WOLFSBURG - Releasing half-yearly results, German carmaker Volkswagen Friday cut its forecast for full-year operational earnings before special items to EUR 1.9 billion.
23 July 2004
WOLFSBURG - Releasing half-yearly results, German carmaker Volkswagen Friday cut its forecast for full-year operational earnings before special items to EUR 1.9 billion.
Domestic sales of its standard Golf and other models have been sluggish, forcing Volkswagen to offer discounts to German buyers.
Earlier, Volkswagen had predicted operational earnings in 2004 would exceed the EUR 2.5 billion of the previous year.
In the first six months of this year, the post-tax surplus at the Wolfsburg-based group fell more than one third year-on-year to EUR 383 million. Sales improved 7.3 percent to EUR 45.9 billion and unit sales rose 5.2 percent to 2.6 million vehicles.
Volkswagen's main brands include Volkswagen, Audi, Seat, Skoda and its Chinese marques.
The group said Friday the US market was a serious concern, because of the weakness of the dollar and fierce discounting.
VW was also hit by the surge in oil prices and its worsening position in its principal foreign market, China, where it has also begun offering retail discounts to buyers.
Analysts had been forecasting bad figures all week from the company and voiced relief that the warning was not direr. Volkswagen stock rose 1.84 percent in Frankfurt trading to EUR 33.25 by early Friday afternoon, ahead of the market.
Volkswagen chief executive Bernd Pischetsrieder said a EUR 2 billion takeover of LeasePlan, Europe's biggest car-leasing company, would be completed in the autumn.
VW is to spend EUR 1 billion to obtain 50 percent of the Dutch company, with the rest to be acquired equally by a Saudi investor and a state-controlled Abu Dhabi company.
Pischetsrieder said he was confident of regulatory approval by the nations involved after European Union watchdogs approved the deal.
Subject: German news