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Volkswagen withdraws outlook after first-quarter operating profit drops 81{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}

FILE PHOTO: Volkswagen logo is seen at the LA Auto Show in Los Angeles, California, U.S., November 20, 2019. REUTERS/Lucy Nicholson

FRANKFURT (Reuters) – Volkswagen Group (VOWG_p.DE) on Thursday withdrew its outlook for 2020 amid uncertainty related to the coronavirus outbreak which caused operating profit to drop 81{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in the first quarter.

Operating profit fell to 0.9 billion euros, which would be an 81{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} drop from 4.84 billion last year, and the group’s return on sales margin is expected to be around 1.6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}, down from 8.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in the first quarter of 2019.

The full year outlook “can no longer be achieved”, Volkswagen said.

VW said negative fair value impacts from commodity derivatives and currency effects hit the first quarter 2020 result by 1.3 billion euros.

Volkswagen now expects first quarter revenue of 55 billion euros ($59.83 billion), down 8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from 60.01 billion euros in the year-earlier period.

The company’s automotive net cash flow amounted to a negative 2.5 billion euros, due to negative effects in working capital from higher inventories and lower liabilities, VW said.

Volkswagen is due to publish full first quarter results on April 29, 2020.

Reporting by Tom Sims and Edward Taylor; Editing by Michelle Martin

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