FRANKFURT -- Volkswagen AG said Thursday that second-quarter net profit slumped 83% due to a severe market downturn, but scrapping incentives in several countries along with a broad geographic exposure enabled it to remain in the black at a time when most rivals are bleeding red ink.
High volatility prevented Volkswagen from making any reliable forecasts for the rest of the year, the Wolfsburg-based auto maker said in a statement. It reiterated that it expected 2009 earnings, revenue and vehicle sales to be lower than last year.
Net profit in the second quarter ended June 30 fell to €283 million (about $398 million) from €1.64 billion in the same period a year ago. Operating profit fell 56% to €928 million from €2.12 billion.
Volkswagen, Europe's largest auto maker by sales, said second-quarter revenue fell 7.7% to €27.2 billion from €29.5 billion as demand for new vehicles waned amid the downturn.
Second-quarter vehicle sales were down 3% on the year at 1.66 million cars and trucks. Production was down 10% to 1.57 million vehicles in the April-to-June period, indicating a further reduction of inventory.
Net cash flow at Volkswagen's automotive operations soared to €4.3 billion in the first six months from €2.3 billion last year.
The company's closely watched net liquidity increased by €4.3 billion from the beginning of the year to €12.3 billion as of June 30, giving it additional muscle to finance the planned acquisition of Porsche Automobil Holding SE's core sports-car operations.
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In addition to revived demand mainly for the company's compact cars and hatchbacks sparked by scrapping incentives, the Audi AG premium division steered better through the industry gloom than its rivals due to its lower exposure to the troubled U.S. market, a large presence in China and the launch of several new or updated models. Audi is also expected to outperform its rivals through the second half of the year.
Audi was the biggest contributor to the group's earnings in the first half of the year with operating profit coming in at €823 million compared to €1.3 billion in the same period in 2008.
Operating profit at the company's core VW passenger car brand fell to €216 million in the first half of the year from €1.3 billion last year.
The Czech Skoda brand posted a €135 million operating profit compared to €381 million in the first half of 2008.
Hurt by weaker demand on its home turf, the Spanish Seat brand swung to a €159 million loss for the first half of the year after eking out €2 million profit last year.
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