Utili Volkswagen 2005: +60,7%

[daimlerchrysler]

Volkswagen 4th-Qtr Profit Almost Doubles on Sales, Lower Costs

Feb. 10 (Bloomberg) -- Volkswagen AG, Europe's largest carmaker, almost doubled fourth-quarter profit as new models attracted customers and the company's German employees agreed to work more for less pay.

Net income climbed to 435 million euros ($521 million) from 234 million euros a year earlier, according to Bloomberg calculations subtracting nine-month profit from full-year figures released by the company. Net income for 2005 rose 62 percent to 1.12 billion euros from 693 million euros in 2004, Wolfsburg, Germany-based Volkswagen said today in a statement.

Chief Executive Bernd Pischetsrieder, 57, introduced new models last year such as the Passat midsize sedan and the Audi A4 luxury car and planned to reduce costs by 3.1 billion euros to boost profit under a program dubbed ForMotion. Wolfgang Bernhard, hired from DaimlerChrysler AG last year to revive profit at the Volkswagen brand, won price concessions in 2005 from parts suppliers and from employees to work longer hours.

The growth in profit ``is attributable primarily to the ForMotion program,'' while the ``earnings level is still unsatisfactory,'' Volkswagen said.

Shares of Volkswagen rose as much as 2.37 euros, or 4.7 percent, to 52.99 euros and were up 4.5 percent at 52.92 euros as of 1:52 p.m. in Frankfurt.

Fourth-quarter net income beat the 223 million-euro median estimate of seven analysts.

Sales in the quarter rose 12 percent to 25.4 billion euros from 22.6 billion euros. Full-year revenue gained 7.1 percent to 95.3 billion euros.

Bernhard's Role

Bernhard, who took over the Volkswagen brand last May, helped fix DaimlerChrysler's Chrysler division by cutting 40,000 jobs, closing factories and trimming supplier costs. Bernhard, 45, said in July that Volkswagen's costs are 40 percent higher than those of competitors. He plans to cut 7 billion euros in expenses by 2008 and introduce as many as 10 new models.

He won three agreements last year from suppliers and German workers to reduce spending. The suppliers accord may save at least 100 million euros. Factory employees in Wolfsburg and Emden, Germany, agreed to work more hours for less pay in exchange for a guarantee of building new models at the plants.

New models have bolstered demand at the carmaker. The Volkswagen group's European vehicle sales rose 2.4 percent in the fourth quarter to 661,169 units, while U.S. sales of the Volkswagen and Audi brands rose 4.2 percent to 84,619 cars.

Job-Cut Target

Pischetsrieder said Sept. 5 the carmaker needs to reduce its western German workforce of 103,000 by several thousand positions. He's offering severance packages and early retirement to get workers to leave voluntarily.

``It is better to pay a generous amount now and have a smooth settlement than to spend endless amounts of time around a negotiating table,'' Stephen Pope, head of Equity Research at Cantor Fitzgerald in London who has a ``buy'' rating on the stock, said before earnings were released.

Volkswagen is trying to reduce labor costs through voluntary measures because it's bound by an agreement reached in November 2004 with employees guaranteeing their jobs in exchange for a wage freeze that will eventually save 2 billion euros annually.

``We have factored in 715 million euros for the headcount reduction, of which 315 million euros is charged in the fourth quarter of 2005 and the remaining 400 million this year,'' Patrick Juchemich, an analyst with Sal Oppenheim in Frankfurt who has a ``buy'' rating on the stock, said before earnings were released.

Pischetsrieder said Sept. 9 that Volkswagen had reduced labor costs 1 billion euros through the agreement with labor and that he needs to speed up efforts to cut the rest. He's trying to more than quadruple pretax profit to 5.1 billion euros in 2008 from 1.1 billion euros in 2004.

Porsche AG, the German sports-car maker that's now Volkswagen's largest shareholder with an 18.5 percent stake, said Jan. 20 that Chief Executive Officer Wendelin Wiedeking would join Volkswagen's supervisory board effective immediately.

Volkswagen Chairman Ferdinand Piech will step down in 2007 as head of the supervisory board, and the chairmanship will be taken by someone unaffiliated with either Porsche or the German state of Lower Saxony, the second-biggest shareholder with an 18.1 percent stake, Porsche said.

Il 2005 è stato un anno discreto per l' azienda di Wolfsburg. Grazie al taglio dei costi operato da Bernhard e all' aumento delle vendite in europa il livello dei profitti è quasi decente.