Volkswagen earnings slide sharply, but carmaker still in black

Oct 29, 2009, 10:16 GMT

   Wolfsburg, Germany - Earnings at Volkswagen Group slid sharply in the first nine months of 2009, but Europe's biggest carmaker remains in the black, figures released Thursday showed.

Profit after tax crashed to just 655 million euros (980 million dollars) from 3.7 billion euros in the first nine months of 2008.

At its Wolfsburg, Germany head office, the company said it shipped nearly 4.8 million vehicles in the period, roughly in line with the number a year ago, but sales revenue had decreased by 9.7 per cent to 77.2 billion euros.

Volkswagen Group would be 'unable to escape' the downward trend in world car sales for the rest of this year, but 'will continue to outperform the market as a whole and further increase its market share,' a corporate statement said.

'Despite the ongoing difficult macroeconomic environment, the Volkswagen Group generated a clearly positive operating profit of 1.5 billion euros in the first nine months (January - September 2008: 4.9 billion euros),' according to the statement.

'This figure does not include the profit attributable to Volkswagen of more than 500 million recorded by the Chinese joint ventures in China, the group's largest sales market.'

Volkswagen benefited in Germany from a government 'cash-for- clunkers' programme which stimulated sales of its smaller cars.

'The Volkswagen Group is holding its own extremely well despite the adverse conditions. While the global market is contracting by 12 per cent, we are recording stable delivery levels,' said chief executive Martin Winterkorn in a statement.

On the verge of taking over German sports car manufacturer Porsche, Volkswagen stressed that it had deep pockets, noting that net liquidity in its automotive division had increased to 13.4 billion euros as of September 30.

This was 5.4 billion euros higher than at the end of the last fiscal year.