FRANKFURT - Volkswagen AG said on Wednesday its pre-tax profit slipped 10 percent last year, in line with market consensus and just meeting its own target of about four billion euros.
The group, suffering from an aging product range as it battles weak demand and unfavorable exchange rates, posted pre-tax profit of 3.986 billion euros ($4.26 billion), against a consensus expectation of 3.963 billion in a Reuters poll.
Volkswagen said in October it still aimed to post pre-tax earnings of about four billion euros for 2002, although it cautioned that a further deterioration in stock markets could affect its financial result.
The company gave no outlook for 2003, unlike rivals Renault and PSA Peugeot which also both reported a rise in operating profit last week. But Volkswagen said it would propose an unchanged ordinary dividend of 1.3 euros per share.
"If a company is ready to pay an attractive dividend like this, it is a confidence building signal," said Rolf Drees of Union Investment fund managers, which rates VW "neutral."
Volkswagen did not break out fourth-quarter results, but the full-year numbers imply a jump in pre-tax profit in the fourth quarter of close to 50 percent to 1.012 billion euros, according to Reuters calculations, slightly above expectations.
Group revenues for the year slipped 1.8 percent to 86.948 billion euros.
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Volkswagen said cashflow from operating activities at its automotive division rose just 0.4 percent to 8.065 billion euros year-over-year, suggesting a deterioration in the fourth quarter, although analysts were keen for more detail.
"In the absence of any comment at this stage, people might worry that the quality of the earnings in the fourth quarter was low. There could be a very logical explanation, but nevertheless, it begs a question," Lehman Brothers analyst Chris Will said.
VW has said it will provide more details on its results next month when it holds its annual press conference.
Some analysts also were frustrated at the lack of outlook.
Chief Executive Bernd Pischetsrieder said in January, he was confident about earnings and sales this year.
The group's net profit fell 11.3 percent to 2.597 billion euros last year, above market expectations and implying a rise of almost a third in net profit in the fourth quarter.
"The fourth quarter tax rate came in lower than for the full year and we need to know why," said UBS Warburg autos analyst Xavier Gunner.
Although VW put the brakes on a decline in unit sales in western Europe towards the end of last year and has been benefiting from booming sales in China, analysts say buyer incentives have been eating into its profitability.
The group, which is depending on its recently-launched Touran minivan to boost sales this year as its top-selling Golf and Passat models start to look long in the tooth, faces tough competition from peers.
Volkswagen sold 4.98 million vehicles in 2002, a 1.9 percent drop from the previous year, and has said it aims to lift sales to more than five million this year.