Volkswagen scraps full year outlook

Volkswagen scraps full year outlook

Volkswagen scraps full year outlook

Volkswagen AG (ETR:VOW3) said on Thursday that the outbreak of COVID-19 has had a “significant” impact on its business.

Shares in the German company were up during trading on Thursday.

Based on preliminary figures, Volkswagen now expects first quarter sales revenue to amount to roughly €55 billion.

Meanwhile, operating profit is expected to plunge to €0.9 billion, an 81% decline compared to the figure recorded for the first quarter of 2019.

The company scrapped its full year outlook for 2020 and is unable to determine when predictions for the full year can be made.

Many sectors have faced financial challenges as a result of the virus and the measures to contain it.

Stricter lockdown measures were introduced in the UK at the end of March in order to help contain the spread of the illness, closing all non-essential shops.

“The automobile retail network has largely came to a standstill,” Volkswagen said in a statement.

“The Volkswagen Group has already implemented extensive counter measures to reduce costs. Securing liquidity has the highest priority and optimising working capital and prioritising investments are key focus areas,” the company continued.

“The Volkwagen Group is planning the phased restart of production with enhanced safety standards for the workforce. As can be seen from the positive developments in China, economic recovery during the course of the year appears possible,” the company added.

Looking ahead, the company warned that the effects of the illness on consumer demand, the supply chain and production cannot be “accurately forecasted” right now.

Indeed, there is much uncertainty surrounding the pandemic, including its duration.

Shares in Volkswagen AG (ETR:VOW3) were up on Thursday, trading at +1.10% as of 15:33 CEST.