VW second-quarter profit rises 30% on SUVs

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FRANKFURT — Volkswagen Group said its second-quarter operating profit rose 30 percent despite lower vehicle sales, helped by VW brand’s higher-margin utility vehicles and rising volumes at Porsche and Skoda.

Operating profit rose to 5.13 billion euros ($5.71 billion), up from 3.94 billion ($4.4 billion) in the second quarter last year, the automaker said in a statement on Thursday. Vehicle sales fell 1.8 percent.

The operating profit jump was magnified by the absence of a diesel charge that VW booked in the year-earlier period.

VW reiterated it expects vehicle deliveries in 2019 to exceed a prior-year figure and for revenues in the passenger cars and commercial vehicles divisions to grow at least 5 percent.

The automaker said it continues to expect an operating return on sales in the passenger cars area between 6.5 percent and 7.5 percent. VW reiterated that, after special items, it expects the operating return on sales to be at the lower end of the expected range for the group and the passenger cars business area.

CFO Frank Witter said VW expects the proportion of utility vehicle sales to rise to 40 percent by 2020.

“[Utility vehicles] made up 25 percent of overall sales last year, and it is now 35 percent. By 2020 we will probably gain another 5 percent (points),” Witter told journalists on a call on Thursday to discuss second-quarter earnings.

VW’s operating return on sales in the second quarter rose to 7.9 percent, up from 6.5 percent in the year-ago period. In the first half its operating return on sales rose to 7.2 percent, up from 6.8 percent a year ago. By contrast rival PSA Group on Wednesday said it had delivered an operating margin of 8.7 percent in the first half, without providing a quarterly breakdown.

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