Sees additional 1.7 bln eur hit to FY opg profit (Il Sole 24 Ore Radiocor) - Berlin, 10 Jul - German automotive group Volkswagen trimmed its full year operating return on sales target for the group and the Passenger Cars Business Area to 6.5-7.0% from a previous 7.0-7.5% reflecting the impact of a possible shutdown of an Audi electric car factory in Brussels.

Audi resolved to support an information and consultation process at the Brussels Q8 e-tron model family production site, working with social partners to develop solutions to restructure it, in a move that could result in it being closed down.

"The expenses expected as a result of alternative uses or a plant closure, which are expected to be accrued in the third quarter, in conjunction with the other unplanned expenses in the Volkswagen Group, will have a significant impact on the operating result of the Volkswagen Group in the 2024 financial year," Volkswagen warned.

In total, Volkswagen expects to take a 2.6 billion euro hit to its 2024 operating profit mainly related to the Volkswagen Group, the Brand Group Core, the Brand Group Progressive and the Financial Services Division. The Brand Group Sport Luxury (Porsche) and the Brand Group Trucks (Traton) are not affected. It said that this includes a 0.9 billion euro already booked provision for termination agreements as part of the sustainable reduction in administrative personnel costs at Volkswagen AG.

"In view of the additional earnings effects of up to 1.7 billion euros above and beyond the termination agreements at Volkswagen AG, Volkswagen Group does not expect to be able to compensate for these in the current financial year," it said.

The other unplanned expenses comprise various items that had a negative impact on the Volkswagen's operating result in the second quarter. These resulted, among other things, from exchange rate losses in connection with the deconsolidation of Volkswagen Bank Rus in the Financial Services Division and from expenses in connection with the planned closure of the gas turbine business of MAN Energy Solutions.

Volkswagen will publish its half-year financial report on August 1.

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(RADIOCOR) 10-07-24 09:01:26 (0168) 5 NNNN