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Volkswagen 9M Profit Climbs On Strong Deliveries; Backs FY18 View; Stock Up

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Shares of Volkswagen Group (VKW.L,VLKAF.PK,VOW.BE) were gaining around 4 percent in the early morning trading in Germany after the automaker reported Tuesday higher profit in the first nine months of fiscal 2018 with increased deliveries. Further, the company confirmed its fiscal year targets, despite continuously challenging market conditions.

For the year, the sales revenues of the Volkswagen Group and its business areas are intended to grow by as much as 5 percent year-on-year. The company expects that full-year deliveries will continue to moderately surpass the previous year.

For the Group and the Passenger Cars Business Area, the company expects operating return on sales to fall moderately short of the expected range. Adjusted operating return on sales is expected in the range of 6.5 - 7.5 percent in 2018.

Herbert Diess, Chairman of the Board of Management of Volkswagen AG, said, "We are still facing major challenges, that we and the entire automotive sector have to overcome. As we are currently in the midst of a groundbreaking transformation, we have to continue picking up the pace."

For the first nine months of the fiscal year 2018, profit before tax increased by 2.2 billion euros to 12.5 billion euros from last year. The diesel issue gave rise to special items of 2.4 billion euros, lower than the previous year's 2.6 billion euros.

Operating profit increased slightly to 10.9 billion euros. At 13.3 billion euros, adjusted operating profit was slightly higher than last year's 13.2 billion euros. Adjusted operating return on sales stood at 7.6 percent.

Group sales revenue rose to 174.6 billion euros from 170.1 billion euros in the prior-year period.

Volkswagen Group increased deliveries to customers by 4.2 percent year-on-year in the first nine months, despite challenges presented by the WLTP test procedure that resulted in the anticipated temporary third-quarter decline in unit sales particularly in Europe.

The 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, Volkswagen said.

FieldsSales revenue at the Volkswagen Passenger Cars brand rose 7.3 percent to 62.5 billion euros. Sales revenue at the Audi brand, including the Lamborghini and Ducati brands, increased slightly.

Sales revenue at ŠKODA rose year-on-year by 2.1 percent. Porsche Automotive's sales revenue increased due in particular to positive mix effects and higher volumes. Sales revenue for Volkswagen Commercial Vehicles was down 3.9 percent.

In Germany, Volkswagen shares were trading at 144.70 euros, up 4.40 percent.

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