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Volkswagen raises full-year guidance

Volkswagen Group (XETRA:VOW) raised its guidance for operating profit in 2021 as Europe’s largest car maker announced a jump in first-quarter pretax profit.

It expects operating return on sales of between 5.5 and 7.0 percent in 2021, compared with the previous range of 5.0 to 6.5 percent.

The car maker also raised its expectations for net cash flow and net liquidity for the year.

First-quarter pretax profit surged to €4.5bn, from €0.7bn in the year-earlier quarter, as revenue rose 13% to €62.4bn, exceeding the pre-COVID crisis level of 2019. 

Operating profit in the first quarter rose to €4.8bn, from €0.9bn, despite COVID-19 and slight impact from semiconductor shortages, it said, adding that operating return on sales reached 7.7% versus 1.6%.

“The shortage of semiconductors throughout the industry is expected to have a more significant impact in the second quarter than before,” said chief financial officer Arno Antlitz. “Nevertheless, we are confident regarding business development in the full year and have therefore raised our outlook.”

Global market share of passenger cars grew by 0.2 percentage points to 12.4% in the first quarter, boosted by China.

“The group anticipates that – assuming successful containment of the COVID-19 pandemic – deliveries to customers in 2021 will be significantly up on the previous year amid continued challenging market conditions,” the automaker said.

“In the Automotive Division, net cash flow is expected to rise strongly over the prior year with lower cash outflows from diesel and significantly higher effects from mergers and acquisitions, which will lead to a significant rise in net liquidity.”

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