Premium cars push Volkswagen profits above pre-pandemic levels

  • H1 operating income 11 billion euros compared to 9 billion in 2019
  • S1 automotive net cash flow around 10 billion euros
  • Equities up to 5.8%

FRANKFURT, July 9 (Reuters) – Volkswagen’s (VOWG_p.DE) first-half operating profit is expected to reach around 11 billion euros ($ 13 billion), he said on Friday, exceeding levels of ‘before the pandemic thanks to strong demand in Europe and the United States. United States, especially for Porsches and Audi.

High-end brands have been less affected by a persistent global shortage of essential semiconductors, the German automaker said, adding that its financial services arm also helped boost profits.

In the same period last year, Volkswagen recorded an operating loss of 1.49 billion euros, affected by the coronavirus crisis, while it made a profit of around 9 billion in the first half of 2019.

Volkswagen shares rose as much as 5.8% to top the German DAX index (.GDAXI).

Business in China, the world’s largest auto market, was slightly weaker during the period, Volkswagen said. Past industry data showed auto sales in China fell 12.4% in June year-on-year, hit by the global chip bottleneck. Read more

Volkswagen, Europe’s largest automaker, said it now expects the main impact of the shortage, which has also plagued its competitors, to occur in the second half of the year.

The group said the reported auto net cash flow in the first half is expected to reach around 10 billion euros, up from 5.57 billion in 2019 and a negative 4.8 billion last year.

Volkswagen, whose supervisory board is meeting to discuss a contract extension for chief executive Herbert Diess, is expected to release full second quarter results on July 29.

($ 1 = 0.8430 euros)

Reporting by Christoph Steitz Editing by Kirsti Knolle and Mark Potter

Our standards: Thomson Reuters Trust Principles.

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