Volkswagen Withdraws 2020 Guidance, Expects 1Q Revenue Fall

Volkswagen AG said Thursday that it expects revenue to have fallen in the first quarter, as it withdrew its outlook for the full year due to the coronavirus hit.
The German car maker said that, according to preliminary figures, it expects revenue for the period ended March 31 at around 55 billion euros ($60.12 billion). Operating profit is expected to drop to EUR900 million, with a return on sales margin at around 1.6%.
“The turbulent raw-material and financial markets led to significant negative fair value impacts from commodity derivatives and negative currency effects, which burdened the first quarter 2020 result by EUR1.3 billion,” Volkswagen said.
The company said it expects the automotive net cash flow in the first quarter to amount to a negative EUR2.5 billion, mainly because of a weaker underlying operating result as well as negative effects in working capital due to higher inventories and lower liabilities. Automotive net liquidity is seen at EUR17.8 billion.
Volkswagen said it withdrew its guidance for the full year and it is currently not able to accurately forecast the impact of the pandemic on customer demand, supply chain and production.