How did VW recover to profit despite pandemic impacts?

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Volkswagen Group Returns to Profit in Third Quarter Amidst Pandemic Recovery

The Volkswagen Group experienced a significant turnaround in the third quarter of 2020, returning to profitability after being heavily impacted by the Covid-19 pandemic in the first nine months of the year. The company reported a net profit of €2.8 billion for the three months ending September, a substantial improvement from the €1.5 billion loss recorded in the preceding quarter. This recovery, however, still represented a 31 per cent decrease in net profit compared to the same period in the previous year.
Third-Quarter Financial Performance Shows Marked Improvement

Following a challenging start to the year, Volkswagen's financial performance in the third quarter demonstrated a notable recovery trend. While overall revenues for the July-September period saw a 3.4 per cent decrease year-on-year, reaching €59.4 billion, the company managed to significantly narrow its losses. Underlying or operating profit, though down 30 per cent from the previous year, stood at €3.1 billion for the quarter, indicating a return to operational profitability.
Sales Volume Shows Resilience Despite Overall Decline

In terms of unit sales, Volkswagen sold 2.6 million vehicles globally during the third quarter. This figure was a marginal 1.1 per cent lower than in the corresponding period of the prior year. This relative stability in sales volume, despite the broader economic disruptions caused by the pandemic, contributed to the improved financial results.
Cautious Optimism for Full-Year Outlook

Volkswagen's finance chief, Frank Witter, expressed cautious optimism regarding the company's position, stating that the recovery trend in the third quarter highlights the group's robust standing. While anticipating that full-year deliveries to customers will be significantly down compared to 2019 due to the pandemic's ongoing impact, the company expects to conclude 2020 with a positive operating result, albeit severely lower than the previous year. This outlook is contingent on the future trajectory of the pandemic.

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How did VW recover to profit despite pandemic impacts?

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