Volkswagen group profits fell by more than half year-on-year in the third quarter.
Although improving sales helped push operating profits up 15% to €4.3bn (£3.8bn), provisions for Dieselgate fines weighed on overall group earnings, which fell to €1.1bn after tax, from €2.3 in Q3 2016.
“Continuous monitoring of the [emission scandal settlements in North America] has shown that scheme is more comprehensive than expected,” the company told shareholders. “This also entails an expansion to the program period.
“Negative special items of €2.6bn weighed on operating profit in 2017.”
The group added that the EU fines for the Scania truck cartel, which, at €0.88m, were almost double the company’s provision of €0.4bn, also impacted results for Q3.
Nevertheless, momentum from good results in the previous two quarters of this year meant that the group still saw after-tax profits rise over 30% year-on year to €7.7bn in the January-September period.
Demand for financial services was reported to be in good health for Western Europe, North America and China, but slowing down in Brazil. Loans and leasing on new vehicles remained the favourite options for customers.
For 2017, the group reduced slightly profit forecasts, due to special provisions for the many class action cases it faces globally. In Germany alone, the number of individual lawsuits over the emissions scandal was reported to have jumped from 1,300 to 4,600.
Commenting on the results, senior figures in the group took an optimistic view, emphasising the numbers for the year-to-date period.
Matthias Müller, chairman of the board of management for the group, said: “The interim results for the period up to the end of September are very impressive and underpin the trust of customers worldwide in our brands and their products. For this we are thankful.
“These results were also achieved thanks to the hard work of all employees in our group, who, despite the difficult challenges they sometimes face, simply do a good job.”
Frank Witter, member of the board of management with responsibility for finance and controlling, said: “Earnings in the first nine months make us quite optimistic about the year as a whole.
“This is a strong foundation that we can build on. With net liquidity of around €25bn in the automotive division, we have an adequate financial cushion.
However, he also warned that the diesel issue was “nowhere near an end” and would require further effort from the group.
“It is important to remember that in this year alone we have seen outflows of around €14.5bn for the diesel issue.”
“Although there is still a lot to be done, we can definitely be satisfied with what we have achieved so far.”
Müller concluded: “Our operating business is strong, our financial position robust … We have a compelling plan for the future that is being implemented apace. Yet the latest interim financial statements also show what we can jointly achieve in our brand alliance, even under difficult conditions.
“If we continue to collaborate closely and makfactor e even better use of the synergies available in the Group, this will become a critical for success in the profound structural transformation our industry is undergoing.”
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