Volkswagen revenue and profits reach record highs in first half of 2018

BERLIN - The Volkswagen Group achieved record revenue and operative profits during the first half of 2018, corporate earnings figures presented by the German carmaker on Wednesday show.

Gross revenue at the Wolfsburg-based company was measured at 119.4 billion euros ($139.5 billion) between January and June, marking an annual increase of 3.5 percent. Volkswagen operative profits grew by 9.8 percent to 9.8 billion euros during the same period which led to a rise in the group's operative margin from 7.7 to 8.2 percent.

Half-year net profits were up by 2.1 percent at 6.6 billion euros in spite of special "dieselgate"-related costs of 1.6 billion euros. The DAX-listed carmaker hereby succeeded in raising the number of vehicles delivered sold to international customers by 7.1 percent to 5.5 million.

Due to Volkswagen's organizational structure, revenue and profits of its Chinese operations which are held through joint-venture companies, were not included in the headline earnings figures. Although negative currency effects during the past six months weighed significantly on local Volkswagen subsidiaries, the operative profits of the group in China still grew slightly to 2.3 billion euros between January and June.

Commenting on the earnings figures on Wednesday, chief executive officer Herbert Diess highlighted the commercial resilience which his company had demonstrated in a challenging industry environment. "The Volkswagen Group has developed successfully in the first-half year of 2018. Revenue and profit growth was very solid", a statement by Diess read.

The CEO argued that growing vehicle sales suggested that several new models introduced recently by Volkswagen were well-received by customers. "In the coming months we will do everything in our power to show our global customers that we are worthy of their trust," he said.

At the same time, Diess cautioned that Volkswagen could not rest on its laurels as the company was likely to face "grate challenges" in the coming second half of the year. New regulatory requirements created by the Worldwide harmonized Light vehicles Test Procedure (WLPT) for exhaust systems, which will become binding in the European Union (EU) as of September, as well as growing protectionism in particular posed risks to the earning power automotive industry in the third and fourth financial quarter.

Volkswagen nonetheless reaffirmed its prior earnings outlook for the year. The company still expects to achieve annual revenue growth of up to 5 percent in 2018 and record an operative margin above 7 percent.

Volkswagen currently employs more than 600,000 staff across the world and includes the brands Volkswagen, Audi, Porsche, Skoda, Seat, Bugatti, Lamborghini and Bentley, as well as a truck production unit. The publicly-listed group achieved gross combined revenue over more than 230 billion euros in 2017.