The Volkswagen Group made an operating profit before special items of €11.3 ($10.2) billion in the first nine months of the year, an increase of 10.5% from sales of 2.454 million vehicles in Q3 and 7.653 million year-to-date. The sales revenue of €159.9 billion in Q3 was flat though compared to the previous year, and the operating return on sales before special items amounted to 7%.
However, earnings in the third quarter were hurt by more charges from the diesel emission fraud issue of €0.4 billion. For the period January to September, operating profit after special items amounted to €8.6 billion. Profit after tax was €5.9 billion. The share of operating profit attributable to VW’s Chinese joint ventures to the end of September 2016 was down at €3.6 from €3.8 billion.
The Volkswagen Passenger Cars brand’s unit sales of 3.2 million vehicles in the first nine months of 2016 dropped from the prior-year level. Operating profit before special items decreased to €1.2 billion. The decrease, per VW “is primarily attributable to volume, mix and exchange rate effects, as well as higher marketing costs because of the emissions issue.”
Chief Financial Officer Frank Witter said, “The impact of the diesel issue, in particular, required a systematic, disciplined approach to investments and costs. But further significant improvements in productivity and profitability are needed across the whole Group.”
According to VW Group: “Depending on the economic conditions, exchange rate developments and the diesel issue, the Group expects its sales revenue in 2016 to match the prior-year level. In terms of the Group’s operating profit before special items, it is anticipated that the full-year operating return on sales will be at the upper end of the forecast range of 5.0 – 6.0%.