Volkswagen AG posted an 18-percent surge in earnings before interest and taxes (EBIT) in the fourth quarter of 2013 to EUR3.11 billion ($4.27 billion), thanks to record sales at its Audi and Porsche brands that countered investments on new models development and production expansion. The figures were based on Bloomberg calculations using the VW’s full-year and nine-month results.
VW expects its operating profit margins to be between 5.5 percent and 6.5 percent for 2014. The carmaker’s revenue is expected to “move within a range of 3 percent” from a year ago, with sales hiking “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,” VW said in a statement.
Volkswagen is planning to spend EUR84.2 billion through 2018 as it attempts to become the largest carmaker in the world, surpassing Toyota Motor Corp. VW sees an expansion in the United States as vital to that bid. VW’s fourth quarter profit missed the EUR3.17 billion average of 11 analyst estimates surveyed by Bloomberg.
Its gain are currently boosted by its Chinese operations while global growth has been hindered by slumping sales for the VW brand in the US as well as sluggish demand in Europe. VW’s 2013 full-year revenue surged 2.2 percent to EUR197 billion. “Volkswagen should benefit from a gradual revival of the European car market this year,” Daniel Schwarz, an analyst at Commerzbank AG, said prior to the results, adding that growth in China will continue.