Volkswagen has met its first-quarter operating profit forecasts for 2019, despite taking a Euro 1 billion hit due to legal costs related to the 'Dieselgate' diesel emissions scandal.
The company set aside the amount to cover additional legal risks from emissions cheating findings, with cases involving investors and customers still ongoing since the revelations surfaced in 2015.
The firm claims the provision is not related to charges filed against former CEO Martin Winterkorn and four other executives, who are accused of fraud for not reporting the systematic cheating. It brings the total costs from the scandal to around Euro 30 billion, according to reports.
Despite this, increasing sales of the firm’s SUVs and an extensive cost-cutting programme has allowed Volkswagen to forecast revenue growth of 5 percent this year, and a group operating return on sales between 6.5 and 7.5 percent.
Earnings before interest and taxes are at Euro 3.9 billion, which is down on previous years but in line with analysts' expectations. Bentley is also reported to have reversed its loss-making record. However, passenger car sales fell 3 percent to 2.55 million vehicles during the quarter, with supply bottlenecks – caused by having to meet the stricter WLTP emissions regulations – still having a knock-on effect.
Dipan Sur
Viraaj Bhatnagar
Glenn Noronha
Dhruv Dhaka
