Volkswagen today reported a fall in pre-tax profits and sales in the first quarter of what chief executive Matthias Müller said will "undoubtedly be a demanding" year.
The company's share price fell more than 3.5 per cent on the news.
Volkswagen reported a profit before tax of €3.2bn in the first quarter, down 19.3 per cent in the same period a year ago.
The car maker also reported group sales revenue to have dropped by 3.4 per cent to €50.9bn in the three months to the end of march.
Vehicle sales dropped by 1.2 per cent to 2.58bn in the first quarter from 2.61bn in the corresponding period a year ago.
Why it's interesting
Chairman of the board of management Matthias Müller said that the company is satisfied with the overall start to the year, with the notable caveat that it will a challenging 12 months.
For those who may not remember, Volkswagen is the company that last year admitted to having installed software into its vehicles to cheat emissions tests, resulting in widespread recalls and hefty fines on the company.
As a result, VW has already set aside more than €16bn to pay for the costs of the scandal.
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But it said that the first quarter was "solid" and in line with expectations, leading it to reiterate its forecast for 2016 as a whole.
That is, it expects group sales revenue to be down by up to five per cent on the year prior, depending on economic conditions and exchange rate developments, as well as "the backdrop of the diesel issue".
More positively, the company reported operating profit actually up by 3.4 per cent to €3.4bn, helped along by a €300m currency adjustment, that was itself connected to the billions set aside for the emissions crisis.
The Volkswagen brand itself accounted for operating profit of €73m, down from €514m a year prior.
What Volkswagen said
Chief executive Matthias Müller said:
2016 will be a transitional year for Volkswagen that will see us fundamentally realign the group. Nevertheless, we remain confident that our operating business will again record solid growth this year.
The group’s robust financial strength and earnings power are key to our ability to take the necessary decisions calmly and diligently, and to resolve the strategic policies that will shape our future with the necessary determination.
The embattled car maker is still being haunted by the emissions scandal that resulted in the recall of 11m vehicles, causing sales and profits to fall.