German carmaker confirms forecast after jump start to 2017

pulse

May 3, 2017 7:23 AM

The group reported net profit of 3.4 billion billion euros ($3.7 billion) in the period from January to March.

German auto giant VW shrugs off the 'dieselgate' affair to notch up better-than-expected results in the first quarter

German carmaker Volkswagen on Wednesday confirmed its forecasts for 2017 after boosting revenue and profits in the first quarter, even as its emissions cheating scandal continues to make headlines.

The group reported net profit of 3.4 billion billion euros ($3.7 billion) in the period from January to March, up 44 percent compared with the first three months of last year.

Revenues grew 10 percent to 56.2 billion euros.

Both results significantly outperformed forecasts from analysts surveyed by data company Factset.

"Our quarterly figures were positively impacted by the strong performance of the group brands, the launch of new, compelling products and solid earnings in Western Europe," chief executive Matthias Mueller said in a statement.

VW confirmed that its operating profit increased by 28 percent to 4.4 billion euros in the three-month period, raising the return on sales to 7.8 percent.

Looking ahead to the full year, the group said it aims to keep that figure "between 6.0 percent and 7.0 percent," while increasing revenue by up to 4.0 percent compared with last year.

"Challenges will arise particularly from the economic situation, intense competition in the market, exchange rate volatility and the diesel issue," the carmaker said.

Questions remain over who at Europe's largest carmaker knew of a scheme to disguise higher-than-allowed emissions of nitrogen oxides in its diesel vehicles from regulators, which the group admitted to in September 2015.

In recent months, the Porsche-Piech family shareholders have publicly fallen out over the scandal.

And VW has so far set aside more than 22 billion euros in provisions to cover fines and compensation related to the "dieselgate" affair, but experts estimate the final bill could be much higher.

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