Special Items Boost VW Group’s Quarterly Operating Profit

Volkswagen Group reports that special items—mostly related to exchange rates for €16 billion set aside to pay for its diesel cheating scandal—increased the company’s operating profit 3% to €3.4 billion ($2.7 billion) in the first quarter of 2016.

When the €300 million adjustment is excluded, the group’s operating profit fell 6% to €3.1 billion. Net profit dropped 19% to €2.4 billion ($2.6 billion. Vehicle sales by all brands rose 1% to 2.51 million units for the period. But revenue fell 3% to €51 billion ($56.8 billion).

VW Passenger Cars saw operating profits plummet to €73 million ($81 million) from €514 million in the same period last year. The unit’s operating margin shrank to 0.3%.

Audi’s first-quarter operating profit dropped 8% to €1.3 billion ($1.4 billion). The Skoda and SEAT brands hiked their operating profits 30% to €315 million ($351 million) and 64% to €54 million ($60 million), respectively. Porsche’s operating profit in January-March climbed 17% to €895 million ($998 million).

The group describes 2016 as a transitional year, in which it will “fundamentally realign” its structure. The company predicts its full-year revenue will fall 5% to €202 billion, erasing last year’s 5% gain to €213 billion. The company expects full-year revenue from passenger car sales to fall between 5.5% and 6.5%.