FRANKFURT (Reuters) -Volkswagen on Friday cut its profit outlook for the current year due to negative effects from raw materials hedges at the end of the third quarter, Europe’s largest carmaker said.
The company said it no longer expected an operating return on sales between 7.5%-8.5% in 2023, and that its operating result before special items was now seen at the prior year level of 22.5 billion euros ($23.8 billion).
Like many other industrial firms, carmakers hedge against commodity price swings, causing non-cash gains or losses depending on where these instruments are priced, usually at the end of each quarter.
In Volkswagen’s case, this led to a 2.5 billion euro non-cash loss that the carmaker “does no longer expect to be able to compensate” by the end of the year, it said.
The group also released some preliminary third-quarter results, showing that in the July to September period sales grew 12% to 78.8 billion, while operating profit was up around 14% at 4.9 billion euros.
The carmaker is due to release full quarterly figures on Oct. 26.
($1 = 0.9446 euros)
(Reporting by Christoph Steitz; Editing by Jan Harvey)
