German car giant Volkswagen AG on Friday reported steady operating profit and rising revenue last year, but said that its “dieselgate” emissions cheating scandal again inflicted one-off costs of 3.2 billion euros (US$3.63 billion).
Operating profit inched up 0.1 billion euros to 13.9 billion last year, the Wolfsburg-based group said in preliminary results, released unexpectedly ahead of its March 12 annual earnings news conference.
Meanwhile the sprawling 12-brand conglomerate last year increased unit sales by 0.9 percent to 10.8 million vehicles, a new yearly record, with annual revenue up 2.7 percent to 235.8 billion euros.
Chief executive Herbert Diess hailed a “good showing in 2018, especially against the background of the switch to WLTP [Worldwide Harmonised Light Vehicle Test Procedure],” new emissions tests that proved a massive bottleneck for the whole industry from their introduction in September last year.
Volkswagen was particularly happy to hit the high end of its profit margin target, at 7.3 percent — slightly down from 2017.
However, the group said that it spent 3.2 billion euros — the same amount as in 2017 — in one-off costs related to its 2015 admission that it cheated on tests for 11 million diesel vehicles worldwide.
The results release came on the same day as a non-binding opinion from the German Federal Court of Justice on claims against the firm over manipulated vehicles.
Senior judges leaned toward backing customers’ claims against Volkswagen, potentially pointing the way for future deliberations in lower courts over the 2.4 million affected cars sold in Germany.
Despite the legal risks and the costs of a push for new electric and hybrid models, the supervisory and executive boards proposed an increased dividend of 4.80 euros per share, up from 3.90 for 2017.
The group forecast that it would this year “slightly exceed” last year’s unit sales figure, despite challenges from a slowing economy, intensifying competition and volatile exchange rates.
Revenues should increase by up to 5 percent year-on-year, and operating profit between 6.5 and 7.5 percent, managers forecast.
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