The Volkswagen Group 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.
In the full year 2013, the VW Group sold 9.728 million vehicles around the world, around 4.1 percent than the sales figure in 2012, pegged at 9.345 million. The surge in group sales allowed the VW Group to post an increase of 2.2 percent in sales revenues, from EUR192.68 billion in 2012 to around 197.01 billion in 2013. This led to an operating profit of EUR11.76 billion in full year 2013, compared to EUR11.50 billion in 2012, for a surge of 1.5 percent.
Before tax is considered, profit stands at EUR12.43 billion in full year 2012, which is a drop of 51.2 percent from EUR25.49 billion in 2012. Profit after tax is at EUR9.15 billion in 2013, a decline of 58.2 percent from EUR21.88 billion in 2012. The lower profit before tax in 2012 is attributable to the integration of Porsche into the group, which effects is pegged at EUR12.3 billion. Consequently, profit after tax is also lower, as made worse by a surge in the tax rate from 14.1 percent to 26.4 percent.