VW's 3Q net profit up 28 percent to 1.2B euros

[October 30, 2008]  FRANKFURT, Germany (AP) -- Volkswagen AG said Thursday its third-quarter net profit rose 28 percent on improved sales in emerging markets and stuck to its forecast of beating last year's sales.

The Wolfsburg-based company said its net profit from July-September rose to 1.2 billion euros ($1.6 billion) compared with 947 million euros last year.

The increase was attributed to improved sales in emerging markets such as China, Russia and India which had offset slackening demand in Europe and the United States. Sales for the third quarter rose 11 percent to 29 billion euros ($38.3 billion) compared with 26 billion euros a year ago.

"Volkswagen has performed well so far in a difficult environment," chief executive Martin Winterkorn said in a statement. "With its young and environmentally friendly model range, flexible production, solid finances and an outstanding team, the group's foundations are sound."

Volkswagen's nine-month profit rose 28.5 percent to 3.7 billion euros ($4.9 billion) from January to September compared with 2.9 billion euros a year ago. Total sales rose 5.5 percent in the first nine months to 85.4 billion euros ($113 billion) from 81 billion euros in the year ago period.

For the current year, Volkswagen said it continues to expect deliveries, sales revenue and operating profit will exceed the previous year's figures. The company sold 6.2 million cars in 2007 -- helping to push 2007 revenue up almost 4 percent to 108.9 billion euros compared with 104.8 billion euros in 2006.

"We are confirming our forecast for 2008, despite the dramatic deterioration in global economic conditions and the automotive industry environment in recent months", Chief Financial Officer Hans Dieter Poetsch said.

The company went on to say it's set to benefit in the current environment from its high cost and investment discipline, as well as its solid liquidity position and conservative refinancing policy.

Volkswagen said its diverse range of brands gives the group a critical competitive advantage, having launched new models in 2008 enabling the company to expand the group's product portfolio and move into new market segments. Those brands include its marquee nameplate VW, luxury car makers Audi, Lamborghini, Bentley and Bugatti, as well as mid-range models from Skoda and Seat.

"We therefore expect our deliveries to customers in 2008 to beat the previous year's figure. The Central and Eastern Europe, South America and Asia-Pacific regions will record the strongest growth rates."

Shares of Volkswagen were up 7.4 percent at 555 euros ($732.60) in Frankfurt trading.

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[Associated Press; By GEORGE FREY]

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