VW Posts Net Loss of $1.5 Billion in 2015 Due to Diesel Scandal Costs

Volkswagen has reported a brutal net loss of $1.5 billion for fiscal year 2015, a significant drop from the $12.4 billion net profit it recorded for the previous year. The record-setting loss is largely due to costs related to VW’s ongoing diesel emissions scandal, an ordeal the automaker has allocated $18.2 billion to cover anticipated repair costs, fines, and legal expenses.

Volkswagen yesterday released its preliminary financial report, which was initially slated to be released last month. A more detailed report is expected on April 28 when the automaker holds its annual media and investor conference.

“Were it not for the sizable provisions we made for all repercussions of the emissions issue that are now quantifiable, we would be reporting on yet another successful year overall,” Volkswagen Group CEO Matthias Müller said in a statement.

While the automaker saw increases in its consolidated sales revenue and operating profit at $239.5 and $14.4 billion, respectively, those numbers were overshadowed by its special items spending of $19 billion, including the $18.2-billion hit from the emissions scandal, more than double the $7.6 billion Volkswagen initially set aside shortly after the scandal broke last September. Some analysts, however, predict the total cost will likely surpass the $18.2-billion mark.

The automaker has been under intense pressure to resolve its diesel scandal. It made significant progess yesterday after announcing a deal it executed with the U.S. Justice Department to offer to buy back around 482,000 vehicles in the ‘States affected by the scandal.

Source: Volkswagen

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