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Skoda Auto 2011 Operating Profit Rises 66% on China, Russia

March 21 (Bloomberg) -- Skoda Auto AS, the Czech unit of Volkswagen AG, said its operating profit rose 66 percent last year, boosted by demand in India, Russia and China.

Operating profit ion 2011 totaled 743 million euros ($985 million) from 447 million euros a year earlier, the Mlada Boleslav, Czech Republic-based company said in a statement handed out to reporters in Prague today. Revenue rose 18.1 percent to 10.3 billion euros.

Skoda’s world market share of the automobile market grew to more than 1.4 percent last year as it delivered 879,200 cars during 2011, up 15.3 percent from the year before, company executives said today at a press conference. Skoda’s board is likely to propose a dividend of about 7.1 billion koruna ($382 million) from 2011 profit, it said.

“The environment for our business has recently cooled slightly, especially in some markets in Europe,” Chief Executive Officer Winfried Vahland said at the press conference. “The overall picture remains positive and we’re cautiously optimistic regarding the years ahead.” Skoda expects to continue to grow in all its regions, Vahland said.

Skoda Auto, purchased by Volkswagen AG shortly after the fall of communism in 1989, aims to grow twice as fast as its parent. The carmaker reiterated today its target to deliver 1.5 million units annually by 2018 by providing new models and on rising demand in India, China and Russia.

Last year, Skoda rolled out its Citigo car in the Czech Republic and started to offer the Skoda Rapid model in India. It will present a European version this year.

In Russia, Skoda’s fastest growing European market, the carmaker’s 2011 sales rose 63 percent to 74,100 units from a year ago, Skoda said. In China, which continues to be the company’s largest market, sales advanced 22 percent to 220,100 units, it said. India, where sales rose almost 50 percent is a “growth market par excellence.”

Skoda, whose deliveries rose 11.6 percent from a year ago, expects a “good” first quarter, Vahland said.

To contact the reporter on this story: Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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