Good financial results for Skoda, despite a tough 2015 image

The Czech brand announced it increased its profit last year, despite a quite challenging year because of slower than expected sales.

Skoda sold more than 1 million cars for the second time in its history last year, increasing its global deliveries by 1.8 percent. “2015 was a good year. Despite challenging market conditions, the company remained on course throughout the fiscal year, setting new records in deliveries, revenue and earnings,” CEO Bernhard Maier said in a statement. The challenging part came because of the pressure triggered by the diesel scandal of its parent-company Volkswagen and the volatility of certain markets. Even if the overall sales result was positive, the demand for Skoda’s models considerably fell in Eastern Europe and took a plunge in Russia, while numbers in China remained flat.

However, sales revenue rose to 12.5 billion euros (2014: 11.8 billion euros), surpassing the previous record, set in 2014, by 6.2 percent, while the operating profit increased by 12.0 percent to 915 million euros (2014: 817 million euros), representing 7.3 percent of turnover (2014: 7.0 percent). “The increase in vehicle sales, a better mix in model versions sold and optimized material costs contributed to this profitable growth,” explained Skoda Chief Financial Officer Winfried Krause. Profit before tax jumped by 9.2 percent to 846 million euros (2014: 775 million euros) and profit after tax in 2015 stood at 708 million euros (2014: 665 million euros), increasing 6.5% percent on the previous year. Skoda said that it made total investments of 591 million euros in 2015 (2014: 698 million euros).

The automaker targets to keep its upward trend by launching a new SUV later this year. “The automotive industry as a whole is facing major challenges. In this environment, Skoda will continue to drive the company’s growth throughout 2016, while investing in the brand’s future under the 2025 Strategy,” its CEO said. “This will specifically involve alternative automotive concepts, the digitization of individual mobility with new offers for our customers, and the expansion of our SUV lineup, starting with the launch of new large SUV this autumn.”