Volkswagen Group reported that its sales revenue fell 3.4 percent during the first quarter of the current fiscal year. Operating profit climbed to 3.4 billion euros (roughly $3.8 billion), up from 3.3 billion euros achieved during the same time period last year.
This first quarter operating profit contained a number of special items, including currency-related adjustments on the provisions VW had already created to pay for the diesel scandal. If it weren’t for these special items, VW says, operating profit would have declined slightly to 3.1 billion euros (roughly $3.5 billion).
Perhaps the biggest news is that VW’s namesake brand suffered dramatically during the quarter. Its operating profit, before special items, fell from 514 million euros to just 73 million euros (which is roughly $81 million). Sales revenue and volume remained down.
Audi’s profit before special items declined from 1.4 billion euros to 1.3 billion euros ($1.4 billion), and VW Group attributes this drop to exchange rates, spending on new products and technologies, and investments in the automaker’s international production network. Bentley recorded a sharp loss of 54 million euros ($60 million) due to slow sales. That’s a huge drop from the 49 million euros in profit it recorded a year ago.
Fortunately, it’s not all bad news. Porsche performed quite well, recording a healthy bump in operating profit from 765 million euros to 895 million euros ($997 million). SEAT, a Spanish automobile manufacturer owned by VW Group, is “on the path to long-term profitability” with profit rising from 33 million euros to 54 million euros. Czech automobile manufacturer Skoda saw its profit rise by just over 30 percent to 315 million euros ($351 million).
Despite the mixed results, VW isn’t getting down on itself. The auto giant declares 2016 will be a “transitional year” for the company.
“In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016. In the first quarter, we once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions,” VW Group boss Matthias Muller said in a statement.
Meanwhile, VW is still working out the details of its post-scandal recovery plan. In its initial settlement plan, VW has agreed to buy back as many as 482,000 cars in the U.S. equipped with 2.0-liter diesel engines.