.

volkswagen znak.jpg
Photograph: Photo by Bruno Kussler Marques, used under CC BY

Volkswagen has plunged into its first loss in more than 20 years as the embattled German carmaker began to count the costs of the exhaust emission crisis that has engulfed the group.

Europe's biggest carmaker reported on Friday a 1.58-billion-euro (1.78-billion-dollar) net loss for last year, after being forced to more than double its provisions to about 16.2 billion euros to help pay the bills for the emissions scandal. VW posted a 10.85-billion-euro profit in 2014.

"Volkswagen is in a very difficult situation," said Hans Dieter Poetsch, the chairman of VW’s 20-member supervisory board.

Based in the northern German city of Wolfsburg, VW admitted last September that it had cheated on diesel exhaust emissions tests for about 11 million vehicles around the world.

VW group chief executive Matthias Mueller declined at a press conference on Friday to provide a figure for the total cost of the scandal, citing ongoing negotiations with US justice authorities.

However, he said the 2015 loss would not have any ramifications for the group's workforce.

The 2015 loss is VW's first net loss since 1993 when it was forced to launch a four-day working week at the height of an economic downturn in Europe.

Meeting at its sprawling Wolfsburg headquarters, the VW board also decided to slash its dividend payment from a record 4.86 euros in 2014 to just 0.17 cents for last year.

In addition, the board decided to put on ice its planned interim report on the emissions exhaust scandal, which was due to be published at the end of this month.

VW said it still expects to bounce back into the black this year.

This is despite forecasting a 5-per-cent contraction in 2016 sales as a result of the slowdown underway in major emerging economies. Group sales in 2015 climbed 5.4 per cent to about 213 billion euros, the company said.

The group has already launched a cost-cutting programme at its core VW brand as it faces up to vehicle recalls, legal action and fines around the world, prompted by the revelations that it had equipped vehicles with software designed to manipulate emissions tests.

Friday's release of the group's key financial data from 2015 came after the company hammered out a settlement with US authorities to compensate US owners of diesel cars that were equipped with the software.

The deal requires VW to buy back or fix some 500,000 affected cars, plus pay substantial damages to consumers in the US.

VW's 2015 operating earnings, which reflects the performance of its core business activities, also slumped into the red, falling from a 12.7 billion euro profit in 2014 to a 4.1-billion-euro loss last year.

Without the massive costs of the emissions scandal, the group said it would have posted an operating profit.

Full details of the company's 2015 earnings are due to be released next Thursday.

Latest news

Croatian MEP says Moscow wants to influence in western Balkans

Croatian MEP Ivan Jakovcic said in an interview with the Montenegrin Pobjeda daily on Thursday that Moscow is trying to exploit the political forces in Montenegro and that Russia's meddling in Montenegro's internal affairs was "unacceptable behaviour."

New York Times launches brand campaign for "The Truth" with Oscars ad

The New York Times is using Sunday's Academy Awards show to launch an advertising drive with an ad spot that capitalizes on President Donald Trump's confrontational relationship with the paper and other mainstream media.

Dutch populist Wilders won't publicly campaign after security fiasco

The Dutch Party for Freedom (PVV) won't make public appearances in support of its election campaign after a security official assigned to protect party founder Geert Wilders was detained by police.

Peace Implementation Council Steering Board calls for defusing tensions in Bosnia

The Steering Board of the Peace Implementation Council in Bosnia and Herzegovina (BiH) met on Thursday, expressing the international community's concern about the situation in the country and calling on local politicians to act rationally to prevent an escalation of the crisis after a motion was submitted to review an International Court of Justice (ICJ) ruling in BiH's case against Serbia for genocide.

Trump blasts Mexico as top diplomat holds talks in Mexico City

US President Donald Trump expressed ambivalence about the US relationship with Mexico as he blasted the country Thursday for what he claims is an unfair trade relationship.

Croat accused of rioting at UEFA 2016 game goes on trial

The trial of Ivan Vucenovic, 21, accused of causing rioting during a European soccer championship match between Croatia and the Czech Republic in Saint Etienne, France last June, began at the Sibenik Municipal Court on Thursday.

Schools blocked, 26 arrests in Paris protests against police abuses

Hundreds of young people took to the streets of Paris on Thursday in protests against alleged police brutality, with local media reporting that 16 secondary schools were forced to shut.

Aid agency: 13 dead among dozens trapped in Libya container

The bodies of 13 migrants were found along with dozens of survivors trapped inside a transport container in Libya's western town of Khoms, an aid agency said Thursday.

Strike grounds hundreds of Alitalia flights

Employees of loss-making Italian airline Alitalia walked off the job Thursday after government-mediated talks failed to break the deadlock, causing the airline to cancel hundreds of flights.

Bosnia requests review of ICJ judgement that exonerating Serbia

Bosnia and Herzegovina's legal counsel Sakib Softic on Thursday submitted a request to the International Court of Justice (ICJ) in The Hague, for a review of a judgement in the genocide suit against Serbia.

Frljic: Warsaw play big hit, ascribes criticism to conservative repression

The media have reported that Polish prosecutors on Wednesday began investigating Frljic's play, which the Catholic Church and the conservative community in Poland have called "blasphemous". 

Germany's record surplus sets off debate about using extra cash

Germany's budget surplus continued to grow last year, reaching its highest level since the reunification of East and West Germany in 1990 and setting off a debate about what to do with the extra cash.