VW skids into red in wake of pollution scandal

GMT 09:24 2015 Wednesday ,28 October

Arab Today, arab today VW skids into red in wake of pollution scandal

German auto giant Volkswagen
Frankfurt - AFP

German auto giant Volkswagen said Wednesday that the global pollution-cheating scam it is currently embroiled in pushed it deeply into the red in the third quarter and would hurt earnings for the whole of 2015.

VW said in a statement that it booked a net loss of 1.673 billion euros ($1.85 billion) in the period from July to September, compared with a profit of 2.971 billion euros a year earlier.

At the same time, the carmaker said it expected full-year operating profit to be "sharply lower" than in 2014.

Global vehicles sales, on the other hand, were still expected to match levels a year earlier and turnover was even projected to rise by "up to four percent".

Nevertheless, in its interim third-quarter report, VW said it expects to face "considerable financial charges" from legal risks related to its revelation that it fitted 11 million diesel vehicles worldwide with sophisticated software that skews the results of pollution testing.

As previously announced, VW set aside 6.7 billion euros in provisions in the third quarter to cover the initial costs of the scandal.

But, in addition, "considerable financial charges may be incurred as legal risks crystallise," the report warned.

Despite the heavy third-quarter loss and the warnings of still heavier costs to come, VW shares were the biggest gainers on the Frankfurt stock exchange on Wednesday as analysts had been expecting it to skid even deeper into the red.

The auto giant touched an intra-day high of 109.55 euros, up 4.18 percent from Tuesday's close.


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