At Corona Turn, Volkswagen Profits Dip Less Than Expected

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In this news, we discuss the At Corona Turn, Volkswagen Profits Dip Less Than Expected

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BERLIN / LONDON / FRANKFURT (Reuters) – Volkswagen reported on Friday that its 2020 profit was nearly halved due to the impact of the pandemic, but a rebound in sales of premium cars in China and stronger deliveries in China. fourth quarter helped keep the world’s largest automaker black.

The group declared full-year operating profit, excluding costs related to its diesel emissions scandal amounted to 10 billion euros ($ 12.2 billion), up from 19.3 billion in 2019.

Analysts expected an operating profit of 4.8 billion euros for the year 2020, according to data from Refinitiv Eikon.

The net cash flow of its automotive division was around 6 billion euros and car deliveries increased towards the end of the year, the German group said in a statement.

“Deliveries to customers of the Volkswagen group continued to recover strongly in the fourth quarter and even exceeded deliveries for the third quarter of 2020,” he said.

The full-year performance crowns a turbulent 2020 for Volkswagen and the automotive industry. A pandemic-fueled drop in sales resulted in a loss in the second quarter before Volkswagen returned to profitability in the third quarter due to growing demand for luxury vehicles in China, the world’s largest auto market.

Volkswagen shares hit their highest level in 11 months after Friday’s earnings release. They are up 2.7% to 166.4 euros at the start of the afternoon.

Major shareholder Porsche Automobil Holding SE, which owns 31.4% of Volkswagen and 53.1% of the group’s voting rights, said it would likely record significantly positive after-tax profit for 2020 as a result.

“The scale of the pace is welcome and supports the upcoming annual results in the industry,” Jefferies analysts wrote.

Volkswagen sales rose 1.7% in December, at a time when new car registrations in Europe fell nearly 4%, according to data from the European Automobile Manufacturers Association.

Volkswagen and its rivals still face challenges due to the coronavirus pandemic, including a global shortage of chips needed for production and ongoing closures in various markets to tackle the outbreak, which means 2021 will be a year. another difficult year.

The manufacturer also faces stiff competition in the development of electrified and autonomous cars. The merger of Fiat Chrysler and Peugeot owner PSA to create the world’s fourth largest automaker, Stellantis, is adding to the pressure.

Volkswagen said on Thursday it missed the EU’s carbon dioxide (CO2) emission targets for its passenger car fleet last year and faced a fine of more than € 100 million.

The group is expected to release detailed 2020 figures on March 16.

(1 USD = 0.8215 euros)

Reporting by Kirsti Knolle, Nick Carey and Christoph Steitz; Edited by Maria Sheahan, Mark Potter and Susan Fenton

Original © Thomson Reuters

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