VW said in a statement it had booked €11.4bn ($14bn) bottom line last year, up from the €5.1bn earned in 2016.
Record sales of some 10.74mn vehicles worldwide helped the group based in Wolfsburg, Germany to boost revenues 6.2% year-on-year, to €230.7bn.
Operating, or underlying profits increased 94.5% to €13.8bn, even after subtracting some €3.2bn in one-off charges “related exclusively to charges...due to the diesel issue,” the firm said.
VW admitted in 2015 to manipulating 11mn diesel vehicles worldwide to fool regulators’ emissions tests, and has since paid out more than €20bn for buybacks, fines and compensation.
Despite last year’s strong performance, “looking ahead, we — like the entire industry — are facing major challenges and radical change,” chief executive Matthias Mueller said.
In the wake of the diesel scandal, VW has promised deep reforms across its sprawling 12-brand empire, which ranges from Lamborghini, Audi and Porsche to Skoda, Seat and its own branded cars.
Like other German carmakers, it plans a slew of new electric and hybrid models over the coming years.
“Shaping the Group’s transformation will not only require a great deal of time and energy; it will also be very expensive.
This is why we must continue to keep our expenditure under tight control,” finance director Frank Witter said.
Hewlett Packard Enterprise
Shares of Hewlett Packard Enterprise rose 7% to a record yesterday after the company unveiled a $7bn share buyback programme, reported strong quarterly results and raised its full-year profit forecast.
At least eight brokerages lifted their price targets on the stock. The results were the first under new chief executive officer Antonio Neri, who took over from Meg Whitman in February.
HPE has been cutting costs and investing in research to bolster its mainstay server business amid competition from cheaper, non-branded assembled servers even as IT spending shows signs of improvement. “We see a clear pattern of improving IT spend after years of under-investment and a pause in spend around cloud decisions,” Morgan Stanley analyst Katy Huberty said.
The company joined NetApp, Cisco and IBM Systems in beating revenue estimates in the latest quarter.
Neri, a computer engineer who has spent more than two decades with the company, was expected to lead a restructuring announced by Whitman in October. HPE forecast an adjusted profit of 29 cents to 33 cents per share for the second quarter, beating the average estimate of 26 cents, according to Thomson Reuters I/B/E/S.
IAG
IAG, which owns British Airways and Spanish carrier Iberia, said yesterday that full-year net profit gained only slightly, as restructuring costs offset benefits from the demise of smaller rivals.
Profit after tax grew 3.6% to €2.0bn ($2.5bn) in 2017 from a year earlier, the owner also of Irish airline Aer Lingus and Spanish carrier Vueling said in an earnings statement.
The group suffered an exceptional restructuring charge of €288mn last year, while passenger numbers rose 4% to almost 105mn.
Stripping out one-off items, IAG said operating profit jumped 19% to €3.0bn — a level that however failed to match market expectations, sending the company’s share price sliding 5.0% yesterday.
“In the bigger scheme of things, the earnings miss was only minor and the business remains confident about its prospects, as reflected by guidance for 2018 operating profit,” noted Investment Director Russ Mould at AJ Bell.
Looking ahead, IAG said the company “expects its operating profit for 2018 to show an increase year-on-year”.
Last year was a bruising year for some European airlines after the collapse of Air Berlin and Monarch Airlines but such failures provided opportunities for the likes of IAG to gain more passengers.
Pearson
Educational publisher Pearson expects its underlying profit to increase for the first time in six years in 2018 after rebuilding its business for students of the “Spotify generation” who want to rent rather than buy books. Chief executive John Fallon has cut thousands of jobs and sold assets including the Financial Times newspaper to convert the company from a business selling textbooks and tests to one offering ebooks, rentals and access to online courseware.
The uneasy switch to digital, which is similar to the changes endured by the music industry, has resulted in a string of profit warnings at the 174-year-old company, three restructurings and a halving of the share price since 2015.
But on Friday the group reported 2017 profit at the top end of guidance and said it believed it finally had a handle on the pressures on its North American higher education business which accounts for nearly 30% of the group.
The group said yesterday that those cost savings and a lower tax rate had enabled it to post 2017 adjusted operating profit of £576mn, down 9% but at the top end of its recently upgraded guidance.
It reiterated its forecast for 2018 profit of between £520mn and £560mn, which it said represented underlying growth when stripping out disposals and currency moves. In 2011, when it last posted growth, it reported profit of £942mn.
Swiss Re
Soaring financial costs from natural disasters sent profits plummeting at Swiss Re last year, the reinsurance giant said yesterday.
Combined estimated claims from disasters such as Cyclone Debbie in Australia, Atlantic hurricanes Harvey, Irma and Maria, the Mexican earthquakes, and wildfires in California amounted to $4.7bn in 2017. The costs pushed profits down 91% to $331mn (€268mn).
“2017 was clearly a challenging year for the industry — and Swiss Re,” CEO Christian Mumenthaler was quoted as saying in a company statement. “However, we believe the outlook for our industry is now more positive than it has been during the last four years.
Changes in the market environment, such as adjusting property and casualty price levels and increases in interest rates, are expected to be beneficial for our business.
Felda Global
Malaysia’s Felda Global Ventures, the world’s third biggest palm plantation operator, yesterday said net profits for the last quarter fell by a third year-on-year.
FGV saw net profits of 76.6mn ringgit ($19.62mn) for the quarter that ended in December, down from 112mn ringgit the previous year, it said in a local stock exchange filing during the midday break yesterday.
The company’s income statement indicated the losses were prompted by higher costs and losses in joint venture companies. Revenue fell to 4.3bn ringgit, down from 5.2bn ringgit last year.
FGV said its crude palm oil production in 2017 increased on-year by 12% to 2.99mn tonnes, in line with growth of its fresh fruit bunch (FFB) production. “(A reduced labour shortage) will improve harvesting efficiency, and is expected to increase this year’s FFB production by 9% to 4.85mn tonnes,” the company said in a statement.
Rusal
Russian aluminium giant Rusal posted a 42% jump in fourth-quarter core earnings yesterday, helped by higher aluminium prices, and announced billionaire Oleg Deripaska would step down as president, as expected.
Hong-Kong listed Rusal said fourth-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to $586mn from $412mn in the last quarter of 2016.
Analysts had expected core earnings of $598mn.
“The company delivered robust operating results and sales volumes growth, which, coupled with the (aluminium) price’s solid improvement, led to the fourth quarter revenue increasing,” chief executive Vladislav Soloviev said in a statement.
“Overall, the company (is) in good shape for 2018.”
Rusal confirmed Deripaska would step down as president after his inclusion, along with dozens of other tycoons, on a US government list of Russian oligarchs, which could create risks for funding from Western banks.
The world’s second-largest aluminium producer after China’s Hongqiao said its fourth-quarter revenue rose 35% to $2.75bn.
London Metal Exchange aluminium rose 35% over the course of 2017 on prospects that China’s winter pollution controls would curb supplies but has eased slightly so far this year.
Rusal’s quarterly net profit came in at $440mn, down from $645mn a year ago when it recorded a $299mn gain from the sale of its Alpart alumina refinery in Jamaica to China’s state-owned Jiuquan Iron & Steel Group.
Some analysts have said that positive impact from Rusal’s strong financial results could be limited by an ongoing power struggle at Russian mining company Norilsk Nickel, in which Rusal owns a stake.
Royal Bank of Scotland
Royal Bank of Scotland Group reported its first annual profit in a decade yesterday, but the milestone was bitter-sweet for the British bank which had wanted to resolve a multibillion-dollar misconduct case in 2017.
The bank is hopeful the case with the US Department of Justice (DoJ) for mis-selling toxic mortgage backed securities can be settled in the coming months, RBS chairman Howard Davies said.
“That is our hope,” Davies said at a presentation for journalists.”We continue to do whatever we can to try to advance a settlement but we do not have any news to offer... today on that.”
The bank’s £752mn ($1.05bn) profit beat a company-provided average of analyst forecasts for a £592mn loss, with a number having factored in a provision for the DoJ fine. Chief Executive Ross McEwan said the DoJ settlement was out of the bank’s control but it could now begin to think about resuming dividends or buying back shares nearly a decade on from its £45.5bn state bailout during the financial crisis.
“With many of our legacy issues behind us, the investment case for this bank is much clearer and the prospect of returning any excess capital to shareholders is getting closer,” he said.
RBS took £764mn of provisions in the fourth quarter for conduct issues such as its mis-selling of payment protection insurance, which came in at £175mn. Another £492mn went to other cases related to the bank’s mortgage-backed security mis-selling.
Restructuring costs were £531mn for the quarter and £1.6bn for the year.
RBS said it would invest £1.5bn more than previously forecast in the next two years, around £800mn of which will go towards digitisation.
