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Germany's Volkswagen says full-year earnings increased 41 per cent last year to $28.7 billion

By: The Associated Press

Friday, Feb. 22, 2013 at 9:53 AM | Comments: 0

In this March 12, 2012 file picture a Volkswagen New Beetle car is lifted inside a delivery tower in Wolfsburg, Germany. THE CANADIAN PRESS/AP, Michael Sohn

BERLIN - German automaker Volkswagen AG said Friday its net profit increased 41 per cent for 2012, but earnings fell a little short of analysts' expectations and the company issued a cautious forecast for this year.

Full-year earnings rose to €21.7 billion ($28.7 billion) from €15.4 billion the previous year; analysts surveyed by FactSet had expected them to come in just above €22 billion. Earnings were boosted last year in part by an accounting boost from the complex deal that made Porsche one of Volkswagen's 12 brands.

Revenues were up 21 per cent, rising to €192.7 billion from €159.3 billion. The number of vehicles delivered worldwide last year by the group topped 9 million for the first time, rising 12.2 per cent to nearly 9.3 million as growing demand in North America and Asia offset more sluggish sales in Europe, where many countries are in recession.

The company said it expects revenue and deliveries to customers to exceed last year's level in 2013 but that, "given the ongoing uncertainty in the economic environment," its aim is to match the 2012 level of operating profit.

Last year's operating profit came in at €11.5 billion, a 2.1 per cent increase over 2011. Volkswagen proposed raising the dividend on ordinary shares to €3.50 from the previous year's €3.00 and on preferred shares to €3.56 from €3.06.

The company noted that "we are not completely immune to the intense competition and the impact this has on business."

Volkswagen shares dropped sharply after the earnings statement, falling 6.3 per cent to €165 in Frankfurt trading.

The company did not detail fourth-quarter earnings. Friday's statement of key 2012 figures came ahead of a full annual report planned for March 14.

Volkswagen said its supervisory board has adjusted the rules for executive compensation, with the result that managers' pay will decrease compared with 2011 despite the higher operating earnings.

The company said that CEO Martin Winterkorn's earnings for 2012 total about €14.5 million, compared with the previous year's €17.5 million — a change that had been expected. The management board's total pay will sink to about €56 million from €70 million.

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