UPDATE 1-Rising liquidity helps boost Audi H1 net profit


(Adds details, background)

By Christiaan Hetzner

FRANKFURT, July 30 (Reuters) - First-half net profit at Volkswagen's premium unit, Audi , rose 67 percent to 679 million euros ($926.9 million), the maker of the TT sports coupe and Q7 luxury SUV said on Monday.

The gain in bottom-line earnings, exceeding the already reported 40 percent increase in operating profit, was helped mainly by interest income from the investment of rising net liquidity, coupled with higher income from the valuation of commodity futures, it said.

Until this year, analysts could estimate only the direct impact of the Audi brand's results on its parent group, because it was grouped with Spanish loss-making brand SEAT with little further explanation and the figures were not useful.

Now that the Audi Brand Group has been broken up, sales and profit at the Audi brand -- which includes its Lamborghini unit -- match directly with those figures for the first half of 2007 published by Volkswagen on Friday.

This suggests Audi's other figures, which are published only twice a year, may now be more directly comparable to those of its parent and may better reveal the premium brand's true worth to the company, potentially leading to a more accurate market valuation of Volkswagen.

Chief Executive Rupert Stadler said Audi had established a sound base for strong results in the second half and would mark its 12th consecutive year of record deliveries this year after 905,188 Audis drove off dealer lots last year.

"The sharp rise in (unit) sales figures will also be reflected in the revenue and earnings figures," Audi said.

The company expects sales and earnings to improve this year, it said, after making "considerable capital investments in extensions to the model and engine range and in the expansion of the worldwide dealer and service network".

While rivals Mercedes-Benz and BMW are well established luxury nameplates in the United States, Audi has had difficulty raising its brand image and its sales in the world's largest car market -- a factor that has certainly hindered its growth.

Net of investments, first-half cash flow shot up by 80 percent to nearly 1.82 billion euros, lifting its net liquidity by more than 50 percent to 7.12 billion.

For comparison, the entire Volkswagen group's automotive net liquidity amounts to 11.79 billion.



Follow Us

Sponsored Introduction Continue on to (or wait seconds) ×