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Accounting Changes Cut VW Group Profits
Volkswagen AG’s unit sales and revenue gained in the first quarter, but an accounting change turned a slight gain in earnings into a 2% decline.
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Volkswagen AG’s unit sales and revenue gained in the first quarter, but an accounting change turned a slight gain in earnings into a 2% decline.
The group’s retail deliveries grew 7% to 2.68 million vehicles, including an any-month record 1 million units in March. Revenue climbed 4% to €58.2 billion ($70.6 billion). But pretax earnings slipped 3% to €4.5 billion ($5.4 billion) because of a change in the way the company values derivatives.
VW notes that it did not need to make further provisions in the quarter to settle costs associated with its 3-year-old diesel emission cheating scandal. The company also says cash payments for fines and restitution regarding the issue dropped “significantly” in January-March.
All of VW Group’s major brands reported revenue and operating profit gains in January-March. Net liquidity for the Automotive Div. expanded 3% to €24.3 billion ($29.4 billion).
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