Volkswagen's Profits Plunge! Is the Iron Throne More Stable Than Their Finances?

Winter is Coming... For Volkswagen's Profits

Hark loyal subjects! Your Queen Daenerys Breaker of Chains and Mother of Dragons (though sadly Drogon isn't too keen on driving) brings grave tidings from the realm of…Volkswagen. It seems even the mightiest empires can face a bit of a stumble. Their annual operating profit has dropped by 15%! A 15% drop! That's worse than the Red Wedding and certainly more depressing than Joffrey's reign. They claim increasing costs and 'extraordinary expenses' are to blame. Extraordinary? Perhaps they invested in dragon proofing their cars? I know I'd pay extra for that feature.

A Lannister Always Pays Their Debts... Volkswagen Not So Much (Yet)

Despite the profit plunge the Mother of Dragons has to deliver news of revenue of 324.7 billion euros for the year 2024! They are up from 322.3 billion euros in the year prior. So it looks like the company has been increasing in revenue for a few years. They are also expecting revenue to increase by up to 5% in 2025. Good news! Their operating margin is expected to hit 5.5% to 6.5% this year after hitting 5.9% in 2024.

A Slight Setback? Or the Beginning of the Long Night?

Now don't let those numbers fool you. Like the White Walkers appearing harmless at first there are hidden dangers. Vehicle sales dropped by 3.5%! But Volkswagen claims they had 'solid results in a challenging environment'. Challenging? More like facing a Dothraki horde armed with parking tickets. Shares however are up by about 1.9%. The Iron Bank of Braavos is clearly still betting on them which means I should probably buy some stock. After all 'When the sun rises in the west and sets in the east,' then maybe just maybe will I understand the stock market.

Dividends Fit For a King... Well a Slightly Less Rich King

The Volkswagen folks are planning to propose a dividend of 6.30 euros per ordinary share at their annual general meeting. This is a 30% cut from the previous year. Seems even dragons have to tighten their belts. Net liquidity for their autos division ended 2024 at 36 billion euros which is down 10.5% year on year. They expect this to come in between 34 billion euros and 37 billion euros in 2025. Let us hope they continue their robust financing and liquidity policy.

Tariffs! The New Iron Throne to Fight Over

And here's where things get truly thorny. Volkswagen is worried about 'political uncertainty increasing trade restrictions and geopolitical tensions'. Oh honey tell me about it! I've faced more backstabbing than a Lannister family reunion. Increasing competition volatile commodity prices and emissions related regulations are also causing headaches. Seems like everyone's trying to steal their Iron Throne or in this case their market share.

An All American Car Company? Khaleesi Approves

Volkswagen's CFO Arno Antlitz admitted they 'can't be happy' with their current performance. Well no one is ever happy are they? Not even Cersei with a glass of wine and a captive Septa. But he's optimistic about the future highlighting the need to invest in electric vehicles and software. They aim to defend their market share in Europe maintain it in China and expand in America. And on the topic of tariffs Antlitz said they 'already feel like an American company'. Well if they start building cars with dragon riding capabilities they'll have my vote!