VOW Volkswagen AG

--Volkswagen's profit for 2020 fell as pandemic hit sales

--That said, the car maker's sales for the full year beat analysts' expectations

--Volkswagen keeps dividend unchanged and guides for growth in 2021

By Kim Richters

Volkswagen AG on Friday posted a fall in earnings and sales for 2020 amid the coronavirus pandemic, but said it expects deliveries and sales to be higher this year.

The German car maker said aftertax profit for the year came in at 8.82 billion euros ($10.74 billion), compared with EUR14.03 billion for 2019.

Operating profit fell to EUR9.68 billion in 2020, from EUR16.96 billion the previous year. Meanwhile, operating profit before special items--which excludes costs largely relating to the car maker's diesel scandal--came in at EUR10.61 billion.

Sales declined to EUR222.88 billion in the year from EUR252.63 billion, beating a consensus estimate of EUR222.35 billion, according to FactSet.

The auto maker had seen sales volumes and earnings plummet in the first half of 2020 amid the coronavirus pandemic, but business has been recovering noticeably since then, in particular with the help of the rebounding market in China.

Volkswagen proposed a dividend of EUR4.80 per ordinary share and EUR4.86 per preferred share for the year, unchanged from the ones for 2019.

"The financial results now available are far better than originally expected and show what our company is capable of achieving, especially in a crisis," Chief Finance Officer Frank Witter said.

"We intend to carry over the strong momentum from the significantly better second half into the current year, and the programs for reducing our fixed costs and in procurement will make us more robust in the long term," he said.

For 2021, Volkswagen forecasts a noticeable increase in deliveries and a significant rise in sales year-on-year. The company is aiming to hit the higher end of an operating-return-on-sales range of between 5.0% and 6.5%.

At 1441 GMT, preferred shares in Volkswagen traded 2% higher at EUR174.46.

Nord/LB analyst Frank Schwope said the car giant fared significantly better than many competitors amid the pandemic, citing its strong operating result for the year.

Write to Kim Richters at kim.richters@wsj.com

(END) Dow Jones Newswires

February 26, 2021 10:04 ET (15:04 GMT)

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