Germany: Record annual pre-tax profit for Volkswagen Group

Monday, March 10, 2008,

Tags: Financial Results, OEM Strategy, Production Data, Volkswagen.

AutomotiveWorld.com

Volkswagen Group has posted its highest ever profit before tax, recording €6.54bn (US$10.03bn) for CY2007 compared with €1.79bn for 2006.

The Group's sales revenues increased by 3.8% last year, reaching €108.9bn, compared to €104.97bn posted in CY2006. Operating profit rose from €2bn in 2006, when the company had to incur charges of €2.37bn as special items, to €6.15bn last year.

Profit after tax for 2007 stood at €4.12bn, 49.9% higher than a year ago, when the group's profit totalled €2.75bn.

Sales volumes were 6,192,000 units, up 8.2% from 5,720,000 vehicles in 2006. The company attributes this increase to an expansion of its model range.

Vehicle production reached 6,213,000 units last year. This was 9.8% higher than the 5,660,000 units built in 2006. Investments in property, plant and equipment by the Automotive Division saw a 25% increase year-on-year, to €4.6bn.

The division's cash flow from operating activities in 2007 increased by 16.4% to €13.67bn, up from €11.74bn a year earlier. Net liquidity, as at 31 December 2007, was up 89% to €13.48bn, compared with €7.13bn in 2006.

With the planned launch of new models in 2008, the Group expects to exceed the record set in 2007. With regard to deliveries to customers, these stood at 6,189,000 units last year, so the firm expects higher sales revenue year-on-year. The company predicts sales increases especially in the Asia-Pacific region, as well as in Central and Eastern Europe.

"The further optimisation of our processes and our continued systematic cost discipline will also have a positive impact on earnings development. Overall, we expect the Volkswagen Group's 2008 operating profit to exceed the 2007 level," Martin Winterkorn, the chairman of the board of management of Volkswagen AG, notes.

Published on Monday, March 10, 2008