Volkswagen accelerates ahead with 44 per cent jump in profits

Shruti Tripathi Chopra
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Volkswagen To Announce Annual Results
Group profit before tax rose 44.3 per cent to €4.6bn (£3.9bn) (Source: Getty)

Europe's biggest carmaker Volkswagen's profits have accelerated in the first quarter, thanks to its cost-cutting measures.

The figures:

Group profit before tax rose 44.3 per cent to €4.6bn (£3.9bn) while revenues were up 10.3 per cent to €56.2bn.

Operating margins for the German car giant stood at 7.8 per cent, up from 6.1 per cent a year ago before special items.

Quarterly profit at Audi dropped to €1.2bn from €1.3bn a year earlier while earnings for the VW brand hit €869m from €73m. Porsche's operating profit rose to €932m from €855m while Skoda's earnings were up 31.8 per cent to €415m.

Read more: Volkswagen shares are in pole position for a 2017 comeback

Why it's interesting

VW has enjoyed one of its highest quarterly results to date, a sign that it is moving on from the diesel emissions scandal that emerged in 2015. In January this year Volkswagen confirmed it has negotiated a $4.3bn (£3.5bn) draft settlement with US regulators to resolve its diesel emissions scandal.

The German car giant said in addition to the fine it will plead guilty to criminal misconduct as part of the civil and criminal settlement.

However, VW said it remains cautious for its full-year results and expects revenue to grow “by up to four per cent” this year.

"Challenges will arise particularly from the economic situation, intense competition in the market, exchange rate volatility and the diesel issue," the group said.

What Volkswagen said

"Our quarterly figures were positively impacted by the strong performance of the group brands, the launch of new, compelling products and solid earnings in Western Europe," said Matthias Muller, Volkswagen chief executive.

"Our efforts to improve efficiency and productivity across all areas of the company are also paying off. We are encouraged by the strong results presented today. They strengthen our resolve to continue our chosen path with Together – strategy 2025."

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