Volkswagen Profits Soar Despite Diesel Scandal
German car giant Volkswagen reported soaring profits on Thursday for the third quarter free of massive payouts for diesel emissions cheating but the results were still weighed down by new pollution tests.
Net profit at the Wolfsburg-based group more than doubled year-on-year between July and September, to 2.76 billion euros ($3.14 billion) — but still fell short of analysts’ expectations.
In the third quarter of 2017, the bottom line was slashed to 1.07 billion euros by one-off costs of 2.6 billion euros, as a US recall of cars with diesel engines configured to cheat regulatory emissions tests proved more complicated than expected.
Volkswagen remains mired in legal woes over the “dieselgate” scandal first revealed in 2015, with open investigations against former executives, and investors and car owners beating a path to court to claim damages.
But it was the new emissions tests known as WLTP — introduced after the trickery affecting 11 million vehicles worldwide was uncovered — that weighed on this year’s third quarter.
While revenues at VW grew 0.9 percent year-on-year to 55.2 billion euros, operating, or underlying profit before special items fell 18.6 percent, to 3.51 billion.
The group highlighted operating profit over the first nine months was “on par” with last year’s figure, saying that “strong development in the first half of the year and during the summer months was able to compensate for September’s decline in deliveries, which was mainly caused by the WLTP transition.”
Other carmakers have also complained of a bottleneck caused by the new tests, which are designed to better reflect cars’ output of harmful gases like nitrogen oxides (NOx) in real on-road driving conditions.
Looking ahead to the full year, VW confirmed its forecast of unit sales slightly higher than in 2017, with revenues “intended to grow by as much as five percent” compared with the 230.7 billion euros booked last year.