Volkswagen's Q1 Profit Up 44 Percent As Sales Mix Improves

Volkswagen's Q1 Profit Up 44 Percent As Sales Mix Improves

Despite the lingering fallout from Volkswagen AG's emissions-cheating scandal, the automaker is reporting a sharp rise in first-quarter profit, according to MarketWatch.

The Volkswagen Group generated profit before tax of Euro 4.6 (3.2) billion and the pre-tax operating return on sales increased from 6.3 to 8.2 percent.

The company accredits the improvement to cost optimization, positive exchange rates, and refocusing the sales mix toward more profitable models.

Looking ahead to the full year, the group said it aims to keep that figure "between 6.0 percent and 7.0 percent", while increasing revenue by up to 4.0 percent compared with last year. Net cash fell by 3.9 billion euros to 23.6 billion euros.

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"Our efforts to improve efficiency and productivity across all areas of the company are paying off", VW Group CEO Matthias Mueller said in a statement.

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The Volkswagen Group has been pushing its "Together - Strategy 2025" project, which was born out of the diesel "defeat device" scandal that came to light in 2015.

Volkswagen said profit at its troubled core division soared in the first quarter, a sign that long-overdue cost cuts are materialising.

The Volkswagen Group, which owns a number of automotive manufacturers such as Audi, Skoda and Seat, reported that a number of factors contributed to its impressive start to the year.

Volkswagen might have lost some sales in the first quarter of this year, but it won't be too concerned - announcing this week that its operating profit has leapt 40 per cent. As a result, the division's cash flow declined by about EUR3.9 billion from the previous year. The expansion of the worldwide model and technology portfolio in the period under review also led to higher depreciation and amortization charges.

In terms of the Group's operating profit, the company maintained its outlook for operating return on sales of between 6.0 percent and 7.0 percent. The MAN and Scania commercial vehicle brands also increased profits by 28 million and 80 million euros respectively.

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