Volkswagen Profit Falls on China Weakness

By Friedrich Geiger 

BERLIN-- Volkswagen AG's after-tax earnings slipped in the second quarter because of weakness in China and restructuring charges in its trucks business, Europe's largest car maker by sales said Wednesday.

After-tax profit declined almost 16% to EUR2.73 billion ($3.02 billion). But revenue increased 9.9% to EUR56.04 billion, helped by exchange rate effects and a higher share of expensive vehicles among the cars sold. The company's operating profit rose 4.9% to EUR3.49 billion, excluding the Chinese ventures.The company didn't disclose net profit attributable to shareholders.

Volkswagen is integrating its three truck brands MAN, Scania and VW. MAN booked EUR170 million in restructuring provisions in the quarter.

Volkswagen confirmed its prediction of a full-year operating profit margin of between 5.5% and 6.5% for the group, and 6.0% to 7.0% for the passenger cars business.

"The difficult market environment and fierce competition, as well as interest-rate and exchange-rate volatility, and fluctuations in raw materials prices all pose challenges," said Chief Financial Officer Dieter Poetsch.

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