Volk­swa­gen re­sults hit by anti-pol­lu­tion reg­u­la­tions

The Gulf Today - Business - - INTERNATIONAL -

FRANK­FURT: Volk­swa­gen re­ported a smaller than ex­pected 18.6 per cent drop in third-quar­ter ad­justed op­er­at­ing profit, boost­ing its shares de­spite weaker ve­hi­cle sales tied to the in­tro­duc­tion of more strin­gent anti-pol­lu­tion rules.

The car­maker’s ad­justed op­er­at­ing profit came to 3.51 bil­lion eu­ros ($4 bil­lion) in the three months through Septem­ber, bet­ter than the 3.21 bil­lion eu­ros pre­dicted in a Reuters poll of banks and bro­ker­ages.

It af­firmed on Tues­day its tar­get for 2018 op­er­at­ing re­turn on sales be­fore spe­cial items at both the group and its pas­sen­ger cars busi­ness area of 6.5 to 7.5 per cent.

In­clud­ing spe­cial items, such as an 800 mil­lion eu­ros fine against VW’S pre­mium brand Audi, the ad­justed op­er­at­ing mar­gin will fall mod­er­ately short of the ex­pected range, it said.

“The fact that VW does not have to change its fore­cast makes it look more ro­bust than most of its com­peti­tors, namely Daim­ler and BMW, it demon­strates VW’S tal­ents in both the prod­uct and the cost side,” Met­zler an­a­lyst Juer­gen Pieper said.

Shares in Volk­swa­gen rose 4.9 per cent to 149.42 eu­ros, mak­ing them the big­gest gain­ers on Ger­many’s blue-chip DAX index.

Volk­swa­gen has strug­gled to adapt its fleet to the world­wide har­monised light ve­hi­cle test pro­ce­dure, known as WLTP which took ef­fect last month, re­sult­ing in a 3.6 per cent de­cline in de­liv­er­ies dur­ing the quar­ter as some car mod­els re­mained un­avail­able for sale.

Volk­swa­gen is also still feel­ing the im­pact of its 2015 diesel emis­sions scan­dal that has rewrit­ten the rules for the car in­dus­try in many ma­jor mar­kets.

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