By William Boston
BERLIN-- Volkswagen AG reported a 19.6% increase in net profit
for 2014, but warned against gathering economic turbulence that
could batter the automotive industry in 2015.
Volkswagen reported that net profit attributable to shareholders
rose to EUR10.85 billion ($12.3 billion) last year, up from EUR9.15
billion in the same period a year earlier. Group revenue rose 2.8%
to EUR202.5 billion and sales rose 4.2% to 10.14 million
vehicles.
The upbeat earnings were overshadowed by a bleak warning about
business in 2015 and the impact of weak emerging market economies,
continued weakness in Russia and volatile foreign exchange
markets.
"Given the subdued growth prospects in regions outside China,
there is no guarantee that 2015 will be a successful year--either
for the industry or for the Volkswagen group," Chief Finance
Officer Hans Dieter Pötsch said in a statement.
The profit boost in 2014 and proposal to raise the dividend did
little to cheer investors after VW's warning about 2015. Shares in
the company slid nearly 4% in afternoon trade in Frankfurt.
Preliminary results published Friday after a meeting of the
company's supervisory board show that a large part of the increase
in net profit likely came from capital gains from China, adding to
solid results at luxury car maker Audi AG, sports car brand Porsche
AG, and Czech car maker Skoda.
Growth in operating profit, which doesn't include VW's earnings
from China, was slower than net profit growth, rising 8.8% to
EUR12.7 billion.
"We can look back on the past fiscal year with satisfaction:
despite the difficult economic environment, we achieved our goals
for 2014," Chief Executive Officer Martin Winterkorn said.
But Mr. Winterkorn remained cautious for 2015.
Volkswagen predicted a "moderate increase" in car sales this
year and a 4% increase in revenue. The company predicted a return
on sales of between 5.5% and 6.5% this year, compared with 6.3% in
2014 and lower than analyst estimates.
Separately, the company announced that Herbert Diess, a former
BMW executive, would take the helm of the Volkswagen brand, the
company's biggest business, in July, earlier than planned.
Matthias Müller, head of Porsche, was appointed to the VW group
management board in addition to his role as chief executive officer
of the sports car maker.
Volkswagen will release detailed results on March 12.
Natascha Divac contributed to this article
Write to William Boston at william.boston@wsj.com
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