Volkswagen predicts positive 2nd quarter result

• Source: Shanghai Daily
• [09:20 June 22 2009]
• Comments

By Edward Taylor 

Germany's Volkswagen AG will have a "positive result" in the second quarter and would consider giving car maker Porsche SE a loan if asked, VW's Chief Financial Officer Hans Dieter Poetsch said on Saturday.

"We will surely end with a positive result," Poetsch said, referring to the second quarter.

"We've reduced volumes and inventories, which is why we have a strong cash flow. In the second quarter we will continue on this path. Net liquidity will remain at a high level," he said.

Net liquidity in the first quarter was more than 10 billion euros (US$14 billion). Poetsch added that VW, Europe's largest auto maker, is also on track to chalk up a "positive result for the full year."

Many other car makers around the world are running big losses due to a collapse in sales caused by the global economic crisis.

Asked whether VW would consider giving troubled Porsche a loan, Poetsch said: "One would have to examine such a case if it arose."

"If we give a loan, enough collateral needs to be there. Loans can only be given at an arm's length principle. There are no exceptions," he said.

Porsche amassed a 9 billion euro debt pile in an aborted attempt to acquire 75 percent of VW votes, and has looked to rescue itself by uniting with its cash-rich subsidiary.

Porsche has said that it has received a 700 million euro loan from VW. However, Poetsch declined to comment and said he was not aware of any request from Porsche.

Poetsch added that an agreement to create an integrated company with Porsche would not be achieved within a couple of weeks as originally planned.

"It's a demanding task. Important questions need to be resolved beforehand. We're seeking ways, if there are any, to build an integrated firm," he said. "At the moment nobody can say if it makes sense to carry on ... important questions need to be examined."

Poetsch sits on a committee tasked with creating an "integrated" automotive company together with Porsche.

German Economy Minister Karl-Theodor zu Guttenberg was quoted on Saturday as saying the chances of state aid for Porsche were fading.

Porsche said last Friday that it was still in negotiations with the government and state bank KfW, after the bank voted against a 1.75 billion euro loan request.

"The chances of a positive decision have declined objectively because of the negative vote by KfW," Guttenberg told yesterday's Bild am Sonntag newspaper.