Improvement in the European car market has helped the company’s bottom line.
Despite being hit by diesel emission scandal, Volkswagen’s first quarter results have beaten analysts’ expectations. Europe’s biggest car manufacturer achieved this admirable feat by strategic cost cutting. Rising European sales of its cars have also provided it a helping hand.
VW has announced that its operating profit for the six months ended June, excluding one-off items, surged by 7% to 7.5 billion euros.
In an unscheduled update of its interim results, VW disclosed that its results exceeded analysts’ expectations. It however did not disclose what those expectations were.
With this news hitting the share markets, VW’s shares rose by 5.1% to 122.35 euros at 0950 GMT. Its operating profits however have slumped by 22% to 5.3 billion euros.
VW has provisioned 16.2 billion euros for its dieselgate crisis, which includes the cost of fixing the cars, their buybacks and incidental legal expenses.
An improvement in the European car market has boosted its order from large corporate fleets which have bolstered its brand and its earnings.
However, VW has disclosed that it expects its sales revenues for 2016 to decline by around 5% from its previous year figure and expects operating return on sales to hover around 5% to 6%.
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