Audi 'cautiously optimistic' about future after strong third quarter

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Audi expects the trend to continue into the fourth quarter unless there are further restrictions due to the coronavirus pandemic. Photo: Reuter/Larry Downing

Audi (NSU.DE) has said that it is “cautiously optimistic” about the rest of the year after posting strong third quarter results in the midst of the health crisis.

The Volkswagen-owned (VOW3.DE) company revealed that key performance indicators were back at, or above, the prior-year level thanks to market recovery and good operating performance. Both deliveries and revenue were higher in the third quarter than the previous year.

It expects the trend to continue into the fourth quarter unless there are further restrictions due to the coronavirus pandemic.

The company said that a global drop in demand and interruptions in the supply chain led to production stoppages and short-time working at Audi sites, particularly in the first six months. This had a “significant impact” on delivery volumes and financial performance.

However, deliveries to customers rose 6% year-on-year in the third quarter, boosted by strong market demand in China which was 4% up on last year.

Audi brand’s cumulative deliveries of 1,187,190 vehicles in the first nine months represented a 13% fall in total, but it was significantly better than the overall car market, which contracted by a fifth.

On the back of the results it was revealed that parent company Volkswagen has received the green light to remove Audi from the Stock Exchange, according to reports.

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In a conference call on Friday, Arno Antlitz, chief financial officer at Audi, said that the Munich Higher Regional Court granted the application to take the company off the German index, Reuters revealed.

VW, which owns 99.64% of Audi, is set to award shareholders with a cash compensation of €1,551.53 (£1395.94, $1810.73) per Audi share.

On Thursday, Volkswagen Group announced its return to profit in the third quarter, also helped by a surge in demand in China, its biggest market, despite an overall drop in global vehicle deliveries.

Operating profit before special items was €3.2bn ($3.7bn, £2.9bn), rebounding from a loss in the second quarter, the company said in a statement.

Global deliveries rose 3.3% in September, exceeding the level in the same month the year before for the first time this year. Meanwhile, sales revenue between July and September fell 3.4% to €59.36bn.

In a note to clients, Jefferies analyst Philippe Houchois said VW's third-quarter results was a "solid performance with strong cash but relatively muted in the context of the auto sector recovery."

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