Volkswagen on Friday posted a massive loss for 2015 due to charges related from its diesel emissions cheating scandal that were more than double what the automaker initially anticipated.
VW said it lost 5.5 billion euros ($6.2 billion) last year, mainly due to a writedown of 16.2 billion euros ($18.2 billion) to start paying for costs related to unlawfully selling cars equipped with software that disabled emissions controls when the car was not being tested.
The company had previously estimated the scandal would cost it 6.7 billion euros ($7.5 billion). “Analysts at Warburg Research estimate the direct cost of fines, recalls, and settlements worldwide will reach 28.6 billion euros ($32.1 billion) — and that’s excluding any impact on sales and market share,” the Associated Press said.
Excluding the writedown and other charges, VW posted an operating profit of 12.8 billion euros ($14.4 billion) on revenue of 213.3 billion euros ($239.4 billion).
“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,” Chairman Matthias Müller said in a news release. “The current crisis … is having a huge impact on Volkswagen’s financial position.”
Under the terms of a proposed deal with U.S. authorities, which was announced Thursday, Volkswagen agreed to buy back almost 500,000 cars sold in the U.S. equipped with the test-cheating software. Kelley Blue Book has estimated the cost of the buyback at $7 billion.
“The company is certain to face additional billions in fines and compensation paid to owners beyond the costs of repairs or buybacks in the United States,” The New York Times said. “And there are many more faulty cars in Europe and elsewhere in the world still to be dealt with.”
Volkswagen faces a theoretical maximum government fine of $18 billion in the United States. “Overall, investors should be relieved by the fact that Volkswagen has put a number on the financial risk associated with the vast majority of diesel issues,” analysts at Evercore ISI said.
VW shares closed on Friday at $125.45, down about 1.2%.