The dieselgate emissions crisis has led the normally-profitable Volkswagen Group crashing into a significant loss for the 2015 financial year: the company has revealed a massive operating loss of €4.1 billion – that’s £3.2 billion.
A massive €16.2 billion write-down hit due to the emissions crisis has caused the huge turnaround in Volkswagen Group finances.
Even a strong result from its Chinese operations could not stop the firm recording a consolidated post-tax loss of €1.4 billion (£1.1 billion).
The full scale of the loss is revealed by results from the 2014 financial year: Volkswagen AG then posted an operating profit of €12.7 billion.
In other words, the emissions crisis has cost it €16.9 billion in a single financial year.
This is despite Volkswagen Group being profitable: sales profits were actually up 5.4% to €213 billion.
It’s of course the special write-downs totalling €16.9 billion that cost it dearly: the €16.2 billion emissions-related write-down is related to fixing items such as technical modifications to customer cars and global legal risks.
This write-down is up significantly on Volkswagen’s earlier €6.7 billion allowance to cover the dieselgate emissions scandal.
“The Volkswagen Group’s operations are in great shape, as the figures before special items for the past fiscal year clearly show,” said a surprisingly upbeat Volkswagen AG chairman Matthias Müller. “Were it not for the sizeable provisions we made for all repercussions of the emissions issue that are now quantifiable, we would be reporting on yet another successful year overall.
“The current crisis – as the figures presented today also reveal – is having a huge impact on Volkswagen’s financial position. Yet we have the firm intention and the means to handle the difficult situation we are in using our own resources,” Müller added.
The holding company of Porsche first revealed the financial details: it holds a 30.8% stake in Volkswagen AG so is directly affected by the VW results. Porsche SE’s pre-tax loss is expected to be €456 million; tax refunds will cut this to €273 million.
Ironically though, Porsche SE is likely still to be profitable in the 2015 financial year, reporting gains of around €870 million – courtesy of dividends received from Volkswagen AG for the 2014 financial year.