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FRANKFURT (Reuters) – Shares in Volkswagen (ETR:) fell 1.5% in early Frankfurt commerce after Europe’s largest carmaker late on Tuesday issued a revenue warning as a result of fees associated to the doable closure of Audi’s Brussels plant.
Volkswagen mentioned the prices of discovering an alternate use for the Brussels plant or closing it, in addition to different unplanned bills, would have an effect totalling as much as 2.6 billion euros ($2.8 billion) within the 2024 monetary yr.
“The revenue warning wasn’t anticipated. Response relies upon very a lot on analyst suggestions, particularly in the event that they settle for the ‘one-off’ character,” mentioned an area dealer.
Because of the fees, which additionally embody bills associated to the closure of the fuel turbine enterprise of MAN Power Options, Volkswagen now expects an working return on gross sales of 6.5-7% in 2024, down from 7-7.5% beforehand.
Like European friends, Volkswagen is underneath strain to chop prices within the face of fierce Chinese language competitors at dwelling and overseas, one of many drivers of a push to understand effectivity positive aspects of 10 billion euros.
“Any transfer by VW to scale back its value base will probably be welcomed by the market. They’re addressing their excessive mounted prices base, and that is extra necessary,” mentioned Stephen Reitman of Bernstein Analysis.
($1 = 0.9241 euros)
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