Volkswagen cuts dividend as H1 profits plunge on Covid-19 pandemic sales drop
Volkswagen unveiled a first-half operating loss on Thursday after suffering a 27% drop in vehicle deliveries due to the coronavirus pandemic, which forced the carmaker to slash its dividend.
Volkswagen predicted a significant decline in full-year sales from 2019 levels, even though it said global sales had staged a gradual recovery as lockdowns eased.
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The multi-brand car and truck maker said it expects its 2020 operating result before and including special items to be severely lower than in 2019, albeit in positive territory.
(Also read: Volkswagen CEO lauds Elon Musk over Tesla’s earnings and value potential)
The carmaker posted an adjusted operating loss of 800 million euros ($940 million) in the January to June period, down from a 10-billion euro adjusted operating profit in the year-earlier period, and said it will cut its dividend for 2019.
It proposed a dividend of 4.80 euros per ordinary share and 4.86 euros per preferred share, down from a previous proposal for 6.50 euros per ordinary share and 6.56 euros per preferred share.
By contrast, French rival PSA Group on Wednesday delivered a second-quarter profit and reiterated its goal of achieving margins of over 4.5% in its automotive unit this year, even though these were down to 3.7% in the first half.