Volkswagen posts $940 million first-half loss and cuts dividend as pandemic hammers sales

Volkswagen has reported an operating loss of 800 million euros ($940 million) for the first half of 2020 and cut its dividend as the coronavirus pandemic hammered car sales.

This compares to a profit of 10 billion euros for the same period last year. Group sales fell by 23.2% while deliveries plunged 27.4% year-on-year, with the percentage gap to last year’s performance falling consistently since May as worldwide shutdowns caused demand to crater.

At its annual general meeting in September, the German automaker will now propose a dividend per ordinary share for the fiscal year 2019 of 4.80 euros, down from a previously announced 6.50 euros.

Although it warned that “challenges will also arise particularly from the increasing intensity of competition, volatile commodity and foreign exchange markets and more stringent emissions-related requirements,” Volkswagen said it still expects to be profitable for the full year.

Frank Witter, member of the Group Board of Management responsible for Finance and IT, said the first half was “one of the most challenging in the history of our company” due to the Covid-19 pandemic.

“At the same time, we introduced comprehensive measures aimed at reducing costs and securing liquidity early on, which enabled us to limit the impact of the pandemic on our business to a certain degree,” Witter said in a statement Thursday.

“Due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models, we look cautiously optimistic to the second half of the year.”

Shares of Volkswagen are down 21.5% year-to-date.

CNBC / Balkantimes.press