FRANKFURT -- Volkswagen AG expects to keep generating "reasonable" cash flow from its automotive business in the years ahead, Europe's largest carmaker said on Wednesday.
"We are sticking to our forecast that we will end up with a reasonably positive net cash flow in the coming years," Chief Financial Officer Hans Dieter Poetsch told a conference call with analysts that was also broadcast on VW's Internet site.
On Tuesday, the group forecast higher operating earnings before and after one-off effects in 2005 but cautioned that the first quarter would not be satisfactory.
Chief Executive Bernd Pischetsrieder, who declined on Tuesday to say whether this meant a year-on-year earnings decline for the quarter, said the extent of the weakness wouldn't be as dramatic as in 2004, when he forecast that the first quarter would be "miserable".
"Not satisfactory is better than miserable in any language of the world," the VW CEO told analysts.
The company suffered a 46 percent decline in operating profits in the first quarter of 2004.
One of the biggest positive surprises in the past year at Volkswagen though has been the remarkable improvement in net cash flow at its automotive division, which has exceeded the expectations of the market consistently.
Whereas the company burned cash of 2.49 billion euros ($3.33 billion) in 2003, Volkswagen turned this around last year to generate net cash flow of 1.87 billion euros thanks mainly to lower capital expenditure and a careful management of its working capital.
Late in October, Poetsch had said the company would generate a positive net cash flow in the current year.