Volkswagen is because of Corona crisis get deep in the red. In the second quarter, the world’s largest automaker posted an operating loss of EUR 1.7 billion before special items, as the Wolfsburg-based company announced on Thursday. A year ago there was still a profit of 5.1 billion.
In the period from April to June, sales slumped by 37 percent to EUR 41 billion due to the rapidly falling sales, in the first half of the year the decline was 23 percent to EUR 96 billion. However, the percentage backlog in deliveries has been decreasing continuously since May, Volkswagen described a glimmer of hope. In the middle of the year, net liquidity in the automotive sector even rose by almost one billion to EUR 18.7 billion compared to the first quarter. However, the shareholders have to forego the planned increase in the dividend.
“The Covid 19 pandemic made the first half of 2020 one of the most challenging in our company’s history,” said CFO Frank Witter (61). In view of the positive trend in recent weeks and the introduction of numerous new models, the group is now cautiously optimistic about the second half of the year. For the year as a whole, VW confirmed the forecast that deliveries and sales will be significantly below the level of the previous year. Management continues to assume a “serious decline” in the operating result, but does not expect a loss.
Volkswagen keeps dividends stable
Volkswagen intends to adjust the dividend for the past year against the backdrop of the crisis. The shareholders are now to receive EUR 4.80 per ordinary share and 4.86 per preference share, an unchanged amount compared to the previous year. So far, the Wolfsburg-based company had targeted an increase to EUR 6.50 or EUR 6.56 per share certificate. The general meeting on September 30 should decide on the adjustment.
In addition to the Corona crisis, Volkswagen also had recently to fight with a leadership chaos: Various board members and brand bosses had recently been replaced. Among other things, the car company has against the pandemic has a hiring freeze and wants to “turn every euro”.
“There can be no manufacturer other than Tesla in the black”
The Automotive industry struggles hard in the Corona crisis. Just had last week Daimler lost billions announced. It doesn’t look any better for the rest of the competition either: Renault reported a record loss of 7.3 billion euros for the first half of the year on Thursday. The Opel mother Peugeot was able to stay in the profit zone in the first half of the year. For the period from April to June, analysts also expect the French to have deep red numbers. “There can actually be no manufacturer other than Tesla in the black,” said NordLB analyst Frank Schwope.
After a lockdown lasting several weeks, Volkswagen had begun restarting production across Europe. Due to the fear of a recession, sales are only recovering slowly. In China, where the pandemic originated, sales picked up again more quickly after the government-mandated standstill to contain the virus and could soon return to its former strength – provided the consequences of the feared second pandemic wave are limited.