VW's Net More Than Doubles, Buoyed by Rise in Global Sales
April 25, 2011
Volkswagen AG said its first-half earnings more than doubled on a 14% rise in world-wide sales. Europe's biggest automotive group said it expects its full-year results to be strong as well. VW said net income surged to 282 million marks ($190.8 million) from 113 million marks a year earlier, as sales increased to 50.5 billion marks from 44.5 billion marks. The auto maker attributed the gains to cost-cutting and a strong performance by the VW brand division, Audi AG luxury-cars division and group financing and leasing division, as well as its Brazilian subsidiary, VW do Brasil. The company didn't provide a specific breakdown. VW's shares ended the day in Frankfurt up 1.80 marks, or 0.3%, at 524 marks. ``I had expected 330 million German marks in profits,'' said Ramsey Pierre, an analyst at Bayerische Vereinsbank AG in Munich, noting that VW had booked 524 million marks in one-time charges in the period, up from 24 million marks a year earlier. ``I don't know why they're saving all that money.'' Klatt Albanese, a board member and spokesman, said the huge transfers into reserves were largely provisions against foreign-exchange losses. But he said they also reflected VW's ``conservative bookkeeping practices,'' which he said don't aim to please analysts. Indeed, despite the increase in earnings, VW is still considered Europe's least profitable auto maker. VW's operating profit per car in the first half was below 468 marks. Separately, French car maker Renault SA said its first-half sales fell 2.9% to 94.1 billion francs ($18.59 billion) from a restated 96.9 billion francs a year earlier. Sales fell 5% in the first quarter and 0.8% in the second, the company said. The decrease reflects a 10% drop in first-half truck revenue, to 15.4 billion francs from 17.2 billion francs. Car sales edged down to 74.53 billion francs from 74.67 billion francs a year earlier.
