Volkswagen slumped to its first net loss in at least 15 years in the third quarter and warned that full-year operating profit would fall “significantly” due to costs related to the diesel emissions scandal.
VW booked a ￠6.7bn provision for anticipated costs to repair diesel vehicles containing so-called defeat devices, which was a fraction more than the ￠6.5bn VW previously said it would set aside.
The German carmaker, which was reporting earnings for the first time since US regulators uncovered the manipulation of diesel emissions tests last month, posted a ￠1.7bn net loss attributable to shareholders. That compares with a ￠2.9bn net profit a year earlier.
Although VW admits that its employees were to blame for the emissions cheating, it said the provisions for repairs were tax deductible under accountancy rules, which management said was “very legitimate and right”. The tax treatment of any fines or penalties would be “probably very different”, VW added.
The carmaker expects full-year group operating profit to decline “significantly” compared with the ￠12.7bn in operating profit achieved in 2014.
