VW sets aside over $18 billion dollars for diesel scandal image

In order to make sure it can pay for the cheating scandal, Volkswagen said that 16.2 billion euros (18.2 billion dollars) in provisions were needed, leading to a record loss.

After the emissions scandal broke out in September last year, Volkswagen estimated at that time that 6.7 billion euros were needed to cover up the financial implications of the company’s biggest crisis ever. However, the costs will evidently be much greater, because now the automaker has to set aside 16.2 billion euros to help pay for its cheating scheme. The announced sum was included in VW’s report over the 2015 fiscal year, in which it said the overall loss in earnings before and after amounted to 16.9 billion euros, because of the special provisions. Furthermore, the Group recorded a consolidated loss before and after tax of 1.3 billion and 1.4 billion euros, respectively, the largest in its history. Europe’s largest carmaker also cut its annual dividend 97 percent to 0.17 euros per preferred share.

“Were it not for the sizable provisions we made for all repercussions of the emissions issue that are now quantifiable, we would be reporting on yet another successful year overall,” Chief Executive Officer Matthias Mueller said in the statement. “The current crisis is having a huge impact on Volkswagen’s financial position. Yet we have the firm intention and the means to handle the difficult situation we are in using our own resources,” he added.

The company estimates that 2016 sales revenue for the Group may be down by as much as 5 percent on the prior-year figure, while in terms of the operating profit, it anticipates an operating return on sales of between 5.0 and 6.0 percent this year.