FRANKFURT—Volkswagen reported a second-quarter working loss on Thursday as car deliveries dropped by virtually a 3rd because of the COVID-19 pandemic, forcing the German carmaker to chop its dividend despite a gradual rebound in demand.
The multi-brand automotive and truck maker predicted a big decline in full-year gross sales, regardless that it stated it was seeing a gradual restoration globally as lockdowns eased.
The corporate stated its 2020 working revenue, earlier than and including particular gadgets, can be severely down on the yr before, albeit in constructive territory.
The corporate posted an adjusted working loss of 1.7 billion euros ($2 billion) in the April to June interval, down from a 5.1 billion euro ($6 billion) adjusted operating revenue within the year-earlier period.
Juergen Pieper, automotive analyst at Metzler Financial institution stated the outcomes have been under expectations.
“Revenue and operating revenue are disappointing, so is the efficiency of VW and Audi. The outlook for the yr is nevertheless encouraging, given the gradual gross sales recovery,” stated Pieper, who retains a “buy” score on Volkswagen.
Volkswagen minimize its dividend proposal for 2019 to 4.80 euros ($5.66) per strange share and four.86 euros ($5.77) per most popular share from a previously targeted 6.50 euros ($7.66) per odd share and 6.56 euros ($7.73) per most popular share.
Its shares have been down 5.1 % at 130.58 euros a share ($153.90), underperforming Germany’s blue-chip DAX index which was down 1.eight %.
Volkswagen, like most of its friends, has been bit exhausting by a drop in demand brought on by the pandemic, which has led to restrictions on movement, economic crises and swathes of job losses globally.
One earnings outlier, nevertheless, has been French rival PSA Group which delivered a second-quarter profit on Wednesday and reiterated its aim of attaining margins of over four.5 % in its automotive unit this yr, although these have been down to three.7 % within the first half.
PSA has been more aggressive about restructuring its operations, and pared down the number of automobiles it provides and withdrawn from some markets the place it does not command a big market share even before the pandemic.
Volkswagen stated the adjusted operating return on gross sales in its automotive division fell to minus 9.1 %, down from 8 % in the year-earlier period, weighed down by fees to cover potential diesel risks.
The group is reviewing its corporate construction however there are at present no new plans to discover divestments or listings, based on Chief Financial Officer Frank Witter, who stated that each one 12 brands, which embrace Bentley, Bugatti, Lamborghini, Porsche, and Audi, are still core to the enterprise.
By Edward Taylor