FRANKFURT - Sales of higher-margin sports utility vehicles and cost cuts helped Volkswagen shrug off a 1 billion euro legal charge to meet first-quarter operating profit forecasts on Thursday, sending its shares 4.5 percent higher.
Luxury brands Porsche and Audi remain key profit contributors, making up around 40 percent of group EBIT. Ongoing supply bottlenecks caused by difficulties getting cars certified for stricter emissions tests, as well as economic weakness in China, South America and Russia, and legal issues pose risks to VW Group’s business, the carmaker said.
Volkswagen stuck to its forecast of higher unit sales, revenue growth of up to 5 percent this year, and for a group operating return on sales of 6.5-7.5 percent.VW maintained its guidance for free cashflow to reach 10 billion euros by 2020, despite an inventory build-up due to difficulties getting vehicles cleared for sale in China and the United States.
VW said the provisions are not related to prosecutor charges filed last month against former VW CEO Martin Winterkorn and four other VW executives who are accused of fraud for failing to report systematic emissions cheating.
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