First VW dividend cut in more than 10 years
Europe's biggest carmaker, Volkswagen has cut its dividend for the first time in more than ten years.
Weak sales, the strong euro and the effects of an ageing product line are the main factors behind the German group's move.
It reduced its dividend by 19% to €1.05 in 2003 from €1.30 a year earlier, after reporting a drop of almost 48% in operating profits before extraordinary items to €2.49bn ($3.21bn).
Net profit fell 57% to €1.12bn in 2003, on sales of €87.15bn compared with €86.95bn a year earlier.
However, the company beat its own forecasts for operating profits "slightly less than half" the 2002 result, and investors, who had feared an even larger reduction, reacted with relief.
The group reported one-time charges of €711m in the fourth quarter, to cover the costs of cars and technologies that are failing to generate the revenues the company expected.
Analysts believe the Phaeton, VW's slow-selling luxury sedan, is largely to blame.
Restructuring in Brazil, where the group is aiming to shed 4,000 jobs because of chronic overcapacity, is also a factor.
The group is scheduled to hold its annual news conference on March 9.
VW's shares jumped almost 3% to €40.40 in early trading today.
