Volkswagen posted a €3.48 billion third-quarter loss, its first in more than 15 years, and said full-year earnings will come in significantly below last year’s level amid the diesel emissions scandal.
The operating loss, which compared with a €3.23 billion profit a year ago, was wider than the €3.27 billion deficit estimated on average by 11 analysts surveyed by Bloomberg.
The cheating scandal accounted €6.7 billion in special costs in the third quarter, more than the €6.5 billion it originally set aside,the Wolfsburg, Germany-based company said Wednesday. Sales rose 5.3 per cent to €51.49 billion. Chief executive Matthias Mueller will face questioning from investors as he tries to gain their backing for his handling of the crisis.
Volkswagen is bracing for costs that analysts have estimated could total from €20 billion to as much as 78 billion .
The company acknowledged prior to the Wednesday results that the provisions it set aside in the third quarter won’t cover the full cost of lawsuits, fines and repairs for 11 million vehicles fitted with software to rig diesel emissions tests.
“The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear,” Mr Mueller said in the statement. The shares rose 3.3 per cent to €108.6 in Frankfurt.
Volkswagen has lost some €21 billion in market capitalisation since the scandal became public on September 18th. Mr Mueller will need to address questions ranging from the progress of the investigation into how the cheating came about to longer-term strategy issues.
Most pressing are the cost and timing of recalls for 8.5 million cars in Europe and 480,000 in the US.
Though some vehicles will only need a software update, Volkswagen hasn’t said how will fix those that do require new parts. Others may be bought back entirely.