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Containing COVID-19, Volkswagen expects strong rebound in 2021

Deliveries and sales, which were both hit in 2020 as carmakers were forced to idle production while demand briefly fell, are seen up significantly this year. In 2020, sales fell 11.8% to 222.9 billion euros, while deliveries dropped 15.2%.

February 26, 2021 / 08:12 PM IST
Reuters

Reuters

Volkswagen, the world's second-largest carmaker, expects revenue, deliveries and margins to rebound this year, it said on Friday, shrugging off the impact of the coronavirus pandemic that nearly halved profit in 2020.

"Last year, the Volkswagen Group succeeded in containing the effects of the pandemic on its business and laying important strategic foundations for its transformation at the same time," finance chief Frank Witter said.

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Deliveries and sales, which were both hit in 2020 as carmakers were forced to idle production while demand briefly fell, are seen up significantly this year. In 2020, sales fell 11.8% to 222.9 billion euros, while deliveries dropped 15.2%.

The operating return on sales is seen at the upper end of the 5.0-6.5% target range, Volkswagen said, up from 4.3% last year.

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"The financial results now available are far better than originally expected and show what our company is capable of achieving, especially in a crisis," Witter said.

"We intend to carry over the strong momentum from the significantly better second half into the current year."

Despite the profit drop, Volkswagen recommended keeping its dividend to shareholders stable for 2020 versus 2019, when it paid 4.86 euros per preferred and 4.80 per ordinary share, beating the 3.35 euro Refinitiv estimate for preferred shares.

Shares edged up on the news, turning positive and trading 0.5% higher by 1328 GMT.

 
Reuters
first published: Feb 26, 2021 08:12 pm

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