VW Profit Climbs Lifted by Record Deliveries at PorscheChristoph Rauwald
Volkswagen AG, Europe’s largest carmaker, reported an 18 percent gain in fourth-quarter profit as record sales at its luxury Audi and Porsche brands offset spending on developing new models and expanding production.
Earnings before interest and taxes rose to 3.11 billion euros ($4.27 billion) from 2.64 billion euros a year earlier, according to Bloomberg calculations using the Wolfsburg, Germany-based automaker’s full-year and nine-month results. Profit missed the 3.17 billion-euro average of 11 analyst estimates compiled by Bloomberg.
The maker of VW, Skoda and Bentley vehicles forecast operating profit margins to be in a range of 5.5 percent and 6.5 percent for 2014. The compares to 5.9 percent last year. Revenue is expected to “move within a range of 3 percent” from a year ago, as sales rise “moderately.”
“Challenges for the Volkswagen group will come from the difficult market environment and fierce competition, as well as interest rate and exchange rate volatility and fluctuations in raw materials prices,” the company said in a statement today.
Volkswagen, which outsold General Motors Co. last year to become the world’s second-largest carmaker, plans to invest 84.2 billion euros through 2018 to pursue its goal of taking the top spot from Toyota Motor Corp. Expanding in the U.S., where VW has struggled, is key to that push.
The German manufacturer’s growth has been driven chiefly by China, where VW edged out Detroit-based GM in deliveries in 2013 for the first time in nine years. Expansion globally has been held back by declining sales for the VW brand in the U.S., and sluggish demand in Europe,, where industrywide sales are near a 20-year low. Full-year revenue rose 2.2 percent to 197 billion euros last year, the slowest growth since 2009.
“Volkswagen should benefit from a gradual revival of the European car market this year,” Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG, said prior to the results. “Growth in China is set to continue.”
VW, which also makes Scania and MAN heavy trucks, sold 9.73 million vehicles last year, narrowly beating GM’s 9.71 million. Sales at Porsche, which became a fully owned unit of VW in August 2012, rose 15 percent to 162,100 cars last year, while Audi deliveries gained 8.3 percent to 1.58 million. Toyota retained the global No. 1 ranking by selling 9.98 million autos.
VW, which is scheduled to release full earnings details, including brand results, on March 13, proposed a dividend of 4.06 euros per preferred share, up from 3.56 euros a year ago.