Volkswagen profits drop 57%

The German car manufacturer said pre-tax profits plunged 57% to d1.6billion (£1.3bn) between April and June, down from d3.7bn (£3.1bn) over the same period in 2015.

The firm said the VW brand, the group’s largest sales division, saw operating profit for the first half of the year tank by 35% to d900m (£758m), down from d1.4bn (£1.2bn), as it felt the impact of currency fluctuations, lower sales volumes and higher marketing costs linked to “diesel-gate”.

Shares were off more than 2% on the Frankfurt stock exchange.

Frank Witter, the group’s chief financial officer, said the firm had delivered “solid results in difficult conditions”.

He added that it would “require continued hard work to absorb the significant impact from the diesel issue.”

The company revealed in a surprise announcement on Wednesday last week that its operating result before special items rose 7.5% to d7.5bn (£6.3bn) for the first half of the year.

It also said that it would take a d2.2bn (£1.8bn) hit to cover ‘’legal risks’’ in America linked to the diesel emissions scandal.

Chief executive Matthias Muller said: “We will work hard on our earnings power to manage the future investments needed to transform our core automotive business and build an innovative business unit for mobility services.”