The VW brand outperformed expectations, the European auto market improved and corporations purchased more fleet vehicles than expected.
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VW said it would post an operating profit of 7.5 billion euros, or $8.3 billion, for the first six months of the year when excluding one-time items such as the effect of the emissions scandal.
VW admitted previous year to installing illegal software disguising the level of emissions from its diesel cars.
In its statement, the German carmaker, however, also said that it was forced to set aside another 2.2 billion euros “mainly related to further legal risks predominantly arising in North America”.
VW has already set aside €16.2bn to pay for technical upgrades for cars that break clean air standards, buying back cars, and legal costs. Positive impacts from the efficiency programme also contributed, VW said.
Adjusted to take account of the scandal-related special charges, operating profit was EUR5.3 billion in the first half of the year, down from EUR6.8 billion a year ago.
FRANKFURT – Volkswagen (VW) said on Wednesday its first-half operating profit beat expectations, helped by cost-cutting at its core VW brand and rising European auto sales, but announced another €2.2bn provision related to its emissions scandal.
But it added tough economic conditions, particularly in South America and Russian Federation, and volatile exchange rates remained challenges, and kept its forecast for a full-year decline in group revenues of up to 5 percent and an operating return on sales of 5-6 percent.
On Tuesday, the attorneys general of NY and MA claimed that VW’s inability to comply with U.S. emissions standards had allegedly “reached the attention” of Matthias Mueller, the current Volkswagen CEO, and his predecessor Martin Winterkorn as early as July 2006.
And the group, once a flagship of German industry, is also facing regulatory probes and lawsuits filed by auto owners who feel they have been duped and investors who are seeking compensation for the massive drop in the value of their shares. Revenue for 2016 is expected to be down by up to 5pc on the previous year as a combination of the diesel scandal, weaker markets in Russian Federation and South America, and forex movements weigh.
At 0950 GMT, Volkswagen (VW) shares were up 5.1 percent at 122.35 euros.
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“Despite Dieselgate VW reported the best quarterly operating profit ever, ” said Michael Punzet, an automotive analyst at DZ Bank AG, adding that he maintained a “skeptical view on VW” because of remaining uncertainties about the company’s core business and fallout from the emissions-cheating scandal.
