Shares of Volkswagen AG (VLKAF.PK, VKW.L) declined around 3 percent in the morning trade on Frankfurt's Xetra after the German auto giant said it continues to expect flat operating profit in fiscal 2013, citing the ongoing uncertainty in the economic environment. However, sales revenue for the year is still expected to exceed last year with higher deliveries and is projected to outperform the market, despite the intense competition.
Martin Winterkorn, chairman, said, "Volkswagen is feeling the headwinds -especially in Europe. Nevertheless we remain guardedly confident."
Volkswagen said it will take care to further increase profitability in all regions and to establish ourselves on new growth markets.
Despite tougher competition and difficult economic conditions, in the first two months of 2013, the company delivered 1.4 million vehicles, excluding MAN and Scania, a growth of 8.3 percent, more strongly than the market. The company added that its brands will launch a large number of fascinating new models in 2013 to help further expand its strong position on the global markets.
According to the company, disciplined cost and investment management and the continuous optimization of Volkswagen's processes remain an integral part of the Strategy 2018. The modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on its cost structure.
Volkswagen's growing presence in all key markets, outstanding brand portfolio and product range combined with sound finances are contributing to the systematic implementation of Strategy 2018. The carmaker is reportedly planning to increase its production in China by 60 percent by 2018, with a new plant to start operation in 2016.
In the preceding fiscal year 2012, Volkswagen outperformed the market, growing in almost all key regions despite the tough environment. The company's consolidated operating profit was 11.5 billion euros, slightly higher than 11.3 billion euros. Annual sales revenue increased 20.9 percent to 192.68 billion euros.
Profit attributable to shareholders of Volkswagen climbed 41 percent to 21.72 billion euros or 46.42 euros per share, mainly reflecting positive effects from the final measurement of the put/call rights relating to Porsche as of July 31, 2012.
Deliveries climbed 12.2 percent to 9.3 million vehicles, with which its global share of the passenger car market rose to 12.8 percent from last year's 12.3 percent.
As announced earlier, the Board of Management and Supervisory Board will propose an increase in the dividend for Volkswagen shareholders to 3.50 euros per ordinary share from last year's 3 euros, and 3.56 euros per preferred share from last year's 3.06 euros, citing the company's continued success.
On Frankfurt's Xetra, Volkswagen shares are currently trading at 154.25 euros, down 5.30 euros or 3.32 percent.
For comments and feedback: editorial@rttnews.com