Diesel Charges Drag VW into €4.1 Billion Operating Loss

Volkswagen AG says special charges of €16.2 billion ($18.3 billion) related to its diesel emission cheating scandal pushed the company into a €4.1 billion ($4.6 billion) operating loss in 2015.

The company’s net loss last year was €1.6 billion ($1.8 billion), reversing a profit of €10.9 billion in 2014.  It was VW first’s full-year loss since 1993.

VW’s group vehicle sales in 2015 declined 2% to 9.93 million units. But a richer product mix increased revenue 5% to €213.3 billion ($240.4 billion). Automotive operations improved cash flow 10% to €23.8 billion ($26.8 billion) and hiked net liquidity 39% to €24.5 billion ($27.6 billion).

The company says the €16.2 billion in identifiable diesel-related charges related to recalls and pending repairs, customer payments, legal costs and vehicle buybacks. VW initially set aside €6.7 billion for those costs.

The company says it will slash its 2015 dividend on common shares to €0.11 ($0.12) from €4.80 in 2014. The dividend on preferred shares will plunge to €0.17 from €4.86.

VW predicts its overall unit sales in 2016 will be flat. But it expects income to shrink 5% because of a “sharp decrease” in passenger car revenue.