Volkswagen forecast operating profit would rebound this year
By Andrew C., 26 Aug, 2010. 0 Comments
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Volkswagen AG's goal to overthrow Toyota Motor Corp.'s supremacy in the automotive industry may be within reach. Amid increasing sales volumes, VW has predicted that its operating profit would make a rebound this year. After the worse-than-expected earnings decline for 2009, VW's preferred shares dropped by 2%. In a regulatory filing ahead of scheduled results on March 11, VW said that the Group's sales revenue and operating profit for 2010 are seen to surpass the prior-year figures despite a shift in volumes between the markets. Interest and exchange rate volatility will remain a drag on profit.
Last year, VW's operating profit plunged 71% to 1.86 billion euros ($2.53 billion). It clearly missed the average estimate of 2.06 billion from a Reuters poll of 13 analysts. Backing out quarterly results from the last interim figures, Volkswagen gained 337 euros in the last quarter of the past year, providing only a 1.2% operating margin.
As the company's voting shares are tightly held by the Porsche and Piech families, Qatar and its home Germany state of Lower Saxony, it suggested cutting its dividend by 17% to 1.66 euros per preferred share despite higher net profit under German GAAP. VW has a plan to increase fresh equity by issuing up to 135 million new preferred shares. As a result, the capital of that stock class more than doubles. VW is doing this in hopes to acquire the Porsche brand of sports cars and the Porsche Holding dealership group worth a combined 16 billion euros in equity and debt.
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