An assembly line worker wears a protective face mask when Volkswagen AG (VW) resumes production at its headquarters in Wolfsburg on Monday, April 27, 2020. Volkswagen resumes production in its largest automobile plant in Wolfsburg, Germany A union leader warns that the political consequences of the coronavirus pandemic could be more harmful than production disruptions.
Volkswagen reported an operating loss of EUR 800 million in the first half of 2020 and cut its dividend as the corona virus pandemic impacted car sales.
This corresponds to a profit of 10 billion euros in the same period last year. Group sales decreased by 23.2%, while deliveries decreased by 27.4% compared to the previous year. The percentage gap to last year's performance has been decreasing steadily since May, as worldwide downtimes caused demand for craters.
At its Annual General Meeting in September, the German automaker will now propose a dividend per ordinary share of EUR 4.80 for the 2019 financial year after EUR 6.50 previously announced.
Although it was warned that "Challenges will arise in particular from the increasing intensity of competition, the volatile raw materials and currency markets and the stricter emissions-related requirements", Volkswagen continues to expect profitability for the year as a whole.
Frank Witter, member of the Group Board of Management responsible for finance and IT, said the first half of the year was "one of the most challenging in our company's history due to the Covid 19 pandemic".
"At the same time, we introduced comprehensive cost-cutting and liquidity-saving measures early on that were able to limit the impact of the pandemic on our business to a certain extent," said Witter in a statement on Thursday.
"Due to the positive trend in our business in the past few weeks and the introduction of numerous attractive models, we are cautiously optimistic about the second half of the year."
Volkswagen shares have fallen by 21.5% since the beginning of the year.