ROUNDUP: VW Group doubles profit despite chip crisis, Covid and Ukraine war

WOLFSBURG (dpa-AFX) – Good business, especially with the particularly profitable luxury class brands, carried the VW (Volkswagen (VW) vz) group through the ailing car economy at the beginning of the year. The Wolfsburg-based company earned almost twice as much in the first quarter as it did in early 2021, despite an overall significant drop in sales. In addition to the global shortage of chips, the war in Ukraine is also putting a strain on the supply chains, and there are also new corona lockdowns in China. So far, Europe’s largest car manufacturer is still successfully resisting the various crises: between January and March, earnings after taxes rose from 3.4 to 6.7 billion euros year-on-year.

The Dax (DAX 40) group had already presented key data on the course of day-to-day business, which it added on Wednesday. Before interest and taxes and special items from the diesel affair, operating profit increased from 4.8 to 8.5 billion euros. This was mainly due to hedging transactions, the value of which rose in the balance sheet in view of rising raw material and energy prices. But the actual business was also doing well thanks to the higher selling prices of the more expensive brands.

The VW preferred share listed in the Dax increased by around 1.8 percent to 152.86 euros after the start. A dealer referred to the strong margins of the Wolfsburg-based company for the high-priced premium models and also for the stock market candidate Porsche. Paper has come under significant pressure this year, since the beginning of the year the assets have lost around 14 percent.

Although the VW Group delivered a good fifth fewer vehicles and manufactured almost 12 percent fewer cars due to the semiconductor crisis, sales increased slightly by 0.6 percent to 62.7 billion euros. However, the takeover of the US truck manufacturer Navistar, which is now included in the figures, also played a role. Management confirmed the forecast for the year.

With a view to the coming months, however, caution is high. It is not yet possible to conclusively assess the “concrete effects of the most recent developments in the Russia-Ukraine conflict or the Covid 19 pandemic on the Group’s business, on the global economy and on the growth of the industry,” it said. CEO Herbert Diess spoke of “unprecedented challenges” for Volkswagen (Volkswagen (VW) vz).

The supply of microchips and various basic resources continues to falter, and the situation has worsened since the Russian attack on Ukraine at the end of February. And in China, the most important individual market, new tough corona restrictions meant that the production lines at VW had to stand still for a long time. Additional production stops are imminent.

In addition, energy costs more and more. “The danger for Europe is huge,” said Diess recently at an event organized by the “Wolfsburger Allgemeine Zeitung” and “Wolfsburger Nachrichten”. “The resulting inflation can destabilize Europe.”

The upper-class subsidiaries and “persistent cost discipline” are stabilizing the group, while mass business with the core Volkswagen brand is particularly affected by the difficult business situation. Sales in the so-called volume group, which also includes Skoda, Seat and light commercial vehicles, fell from 27.4 to 24.4 billion euros. Before special factors, an operating result of 900 million euros was achieved, after 1.4 billion euros at the beginning of 2021. The VW passenger car brand alone slipped in sales from 17.6 to 14.9 billion euros, and its earnings rose from 490 to 513 million euros Remove.

The Premium brand group with Audi, Bentley and Lamborghini increased its adjusted operating result from 1.5 to 3.5 billion euros, while sales remained roughly stable. Porsche also earned more from ongoing business, at 1.4 billion euros (previous year’s quarter: 1.2 billion euros), and sales rose from 7.0 to 7.3 billion euros. The main drivers for this were “higher earnings contributions”. The group recently diverted larger amounts of the available chip inventories to the more profitable brands and electric models. The shortage of cars is also driving new and used car prices./jap/men