FILE PHOTO: A Volkswagen logo is pictured at Volkswagen’s headquarters in Wolfsburg, Germany, April 22, 2016. REUTERS/Hannibal Hanschke/File Photo
German carmaker Volkswagen posted a forecast-beating 23 percent rise in underlying quarterly operating profit on Wednesday, even as difficulties conforming to a new anti-pollution rules cloud the sales outlook for passenger cars.
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A 5.5 percent rise in vehicle sales helped lift second-quarter operating profit before special items to 5.58 billion euros from 4.55 billion a year-earlier, compared with analyst consensus for 4.98 billion in a Reuters poll.
The adjusted return on sales improved to 9.1 percent from 7.7 percent a year earlier.
Despite confirming its outlook for a full-year adjusted operating margin of between 6.5 percent and 7.5 percent, Volkswagen warned that sticking to its financial targets will be a challenge.
After special items, VW said it anticipates that its operating return on sales will fall “moderately short.”
“We cannot rest on our laurels because great challenges lie ahead of us in the coming quarters especially regarding the transition to the new WLTP test procedure. Growing protectionism also poses major challenges for the globally integrated automotive industry,” Herbert Diess said in a statement.
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After special items, which included 1.6 billion euros related to VW’s diesel emissions test cheating scandal, group operating profit dropped by 13 percent to 3.95 billion euros, with the return on sales shrinking to 6.5 from 7.7 percent.
(Reporting by Jan Schwartz and Edward Taylor; Writing by Maria Sheahan Editing by Victoria Bryan)
