FRANKFURT -- Volkswagen Group withdrew its outlook for 2020 amid uncertainty related to the coronavirus outbreak which caused operating profit to drop 81 percent in the first quarter.
The pandemic brought vehicle production and sales to a halt at factories in key markets including China and Germany.
"It is currently not possible to determine when a new outlook can be made for the full year," VW said Thursday in a statement. "The impacts resulting from the pandemic on customer demand, the supply chain and production cannot currently be accurately forecasted," the automaker said.
VW said it expects first-quarter operating profit of 900 million euros ($979 million) based on preliminary figures. That would be an 81 percent drop from the 4.84 billion euro figure last year. It forecasts a return on sales margin of around 1.6 percent, down from 8.1 percent in the first quarter of 2019.
The company expects first-quarter revenue of 55 billion euros, down from 60.01 billion in the year-earlier period.
VW is due to publish full first-quarter results on April 29.
The group initially targeted 2020 global vehicle deliveries on the prior-year level, revenue growth of as much as 4 percent and an operating profit margin between 6.5 percent and 7.5 percent excluding special items.
The full year outlook "can no longer be achieved," VW said.
Negative fair value impacts from commodity derivatives and currency effects hit the first-quarter result by 1.3 billion euros, VW said.
Automotive net cash flow swung to a negative 2.5 million euros, as VW was forced to shut production -- first at plants in China, its biggest market, and then across Europe.
Its automotive liquidity amounted to 17.8 billion euros.
Chief Financial Officer Frank Witter warned on March 17 earnings might fall by at least 50 percent in the first three months. The company is gearing up to restart production in Europe, taking lessons from the earlier experience in China.
VW Group's Audi premium brand said measures to contain the coronavirus pandemic had led retail sales to come to a near standstill. Audi said its sales revenue in the first quarter was 12.5 billion euros, down from 13.8 billion euros in the year-earlier period.
Porsche Automobil Holding SE, the family-controlled holding company which owns a majority stake in VW Group, also withdrew its forecast for 2020 due to the earnings situation at VW.
Bloomberg contributed to this report
