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Aug 1 2009

VW EARNINGS FEEL IMPACT OF FINANCIAL CRISIS – BUT STILL AHEAD OF RIVALS

Posted by volkszone

Volkswagen (VW) yesterday reported a smaller-than-anticipated decline in profit for the second quarter and said growth in emerging markets would help the Audi owner outperform the industry in the second half.

Second-quarter net income fell 83 percent to E283 million (R3 billion) from a year earlier, Europe’s largest car maker said. Profit beat the E238.6m median estimate of five analysts surveyed by Bloomberg. Sales slid 7.7 percent year on year to E27.2bn. The shares rose as much as 4.9 percent in Frankfurt trading.

VW'S LATEST GOLF

VW'S LATEST GOLF

VW’s first-half worldwide car and sports utility vehicle deliveries dropped 5 percent, less than the 18 percent industrywide contraction, as gains in China and Brazil buffered declines in European countries such as Spain and the UK.

The maker of Skoda and SEATcars last week won a battle to combine with Porsche after staving off a takeover attempt by the 911 sports-car maker.

“VW is feeling the impact of the crisis, no doubt, but they’re still performing comparatively well,” said Aleksej Wunrau, an analyst at BHF Bank in Frankfurt. “VW’s liquidity is high and inventory cuts were lower than at competitors.”

VW'S NEW BEETLE

VW'S NEW BEETLE

VW has a broader international presence than its closest European competitor, Paris-based Peugeot Citroen, which reported a first-half vehicle sales drop of 14 percent. The German car maker said its worldwide market share in the six-month period had risen to 12 percent from 9.9 percent a year earlier.

The Volkswagen model range includes the Golf and Polo compacts, which attract consumers seeking fuel efficiency at the expense of German competitors BMW and Daimler, the world’s two largest luxury car manufacturers. VW said it would perform “better” than the overall market in the second half, even though it would fail to resist the “downtrend” in global markets. Revenue would fall short of last year’s level, it said.

The car maker reiterated that full-year earnings would stay “below” levels achieved in previous years.

“High volatility” in markets precluded a “reliable” forecast for the remainder of 2009, VW said.

VW’s global sales in June rose 6.5 percent to 609 800 vehicles, the car maker said last week. That contrasts with declines of 5 percent at Daimler’s Mercedes-Benz Cars unit, which includes the Smart two-door brand, and 13 percent at BMW, which also makes the Mini car. The shares added as much as E11.82 to E253.50 and traded at E252.80 as of 11am in Frankfurt.

Sales by VW in Germany, where the government is offering buyers E2 500 when they trade in a model that is at least nine years old for scrapping, climbed 18 percent to 534 000 vehicles in the six months through June. European car industry sales rose 2.4 percent last month, the first increase in 14 months, as customers took advantage of incentives across the region.

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