Volkswagen Shares Fall After Warning on Ukraine War Impact -- Update
April 14 2022 - 5:45AM
Dow Jones News
By Kim Richters and Ed Frankl
Shares in Volkswagen AG traded lower on Thursday despite higher
first-quarter earnings after the auto maker warned of uncertainties
related to Russia's war in Ukraine and possible supply-chain
bottlenecks.
The German company, whose portfolio includes the Porsche and
Audi brands, cautioned on the war's continuing effects on exchange
rates and commodity markets, and said the impact couldn't be
predicted with certainty.
"There is therefore still a risk that further developments in
the Ukraine war will have a negative impact on the Volkswagen
Group's business activities," it said.
The company warned that supply bottlenecks could arise from the
war as well as from the coronavirus pandemic. Over the past two
years, Volkswagen has repeatedly seen its production disrupted due
to factors including a shortage of semiconductors amid the pandemic
and, more recently, bottlenecks in the supply of wiring harnesses
due to the war in Ukraine.
At 1014 GMT, Volkswagen preference shares were trading 2.2%
lower at EUR148.18.
For the first-quarter, the car maker expects an operating profit
before special items of around 8.5 billion euros ($9.26 billion),
with an operating return on sales of around 13.5%, based on
preliminary data. Volkswagen said its operating performance in the
three-month period was robust and earnings were also boosted by
positive valuation effects related to commodity-hedging
instruments.
Net cash flow in the automotive division was around EUR1.5
billion for the quarter.
In the first quarter of 2021, when there were no special items,
Volkswagen posted EUR4.81 billion in operating profit and an
operating return on sales of 7.7%.
Volkswagen's adjusted operating profit for the first three
months of this year appears to be in line with expectations, while
the free cashflow looks to be below estimates, RBC Capital Markets
said.
Volkswagen plans to post full results on May 4.
Write to Kim Richters at kim.richters@wsj.com and Ed Frankl at
edward.frankl@dowjones.com
(END) Dow Jones Newswires
April 14, 2022 06:30 ET (10:30 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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