FX.co ★ Volkswagen H1 Net Income Declines; Sales Revenue Up 2% - Quick Facts

Volkswagen (stock symbols: VKW.L, VLKAF.PK, VOW.BE) released its financial results for the first half of the year, reporting earnings to shareholders of €6.4 billion, down from €7.5 billion in the same period last year. The earnings per ordinary share were €12.70, a decline from €14.86 previously. The operating result also saw a decrease, coming in at €10.1 billion compared to €11.3 billion in the prior year.

The company attributed the decrease in operating results to several non-operating factors, notably unplanned provisions related to the severance program at Volkswagen AG. The operating margin faced additional pressure from increased fixed costs, expenses associated with the deconsolidation of VW Bank Russia, and the shutdown of a segment of the gas turbine business under MAN Energy Solutions.

On a positive note, sales revenue experienced a slight increase, rising to €158.8 billion compared to €156.3 billion the previous year. Specific to the automotive sector, sales revenue was marginally lower at €129.4 billion, compared to €130.6 billion last year. Volkswagen attributes the overall revenue growth to robust business performance in its Financial Services. However, vehicle sales experienced a 2% decline, totaling 4.3 million units.

Looking ahead, Volkswagen has reiterated its positive outlook for 2024. The company anticipates that sales revenue will surpass the previous year's figures by up to 5%. Additionally, the operating return on sales for both the Volkswagen Group and the Passenger Cars Business Area is projected to be between 6.5% and 7%.