Manufacturer Volkswagen Group saw its sales revenue rise year on year from €56.2bn to €58.2bn but operating profits fall from €4.4bn to €4.2bn in Q1 2018.

The German car maker said the profit fall was in part to reporting requirements under IFRS9, the calculation of derivatives.

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Additional significant provisions in connection with the diesel issue were not incurred in the first quarter of 2018, in addition, there were significantly lower cash outflows in respect of this matter.

Dr. Herbert Diess, Volkswagen chief executive officer, said the results reflected the speed of change in the motoring industry.

“Our goal is to transform the Volkswagen Group into one of the industry’s leading companies in terms of profitability, innovative power, and sustainability. The quarterly results confirm that we are on the right path,” said Diess.

The Group’s operating profit does not include the proportionate operating profit from its Chinese joint ventures. This rose to €1.2bn,  despite negative exchange rate effects, from the beginning of January to the end of March 2018.

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These companies are accounted for using the equity method and are therefore reflected in the Group’s financial result. After taxes, the Group’s three-month profit stood at €3.3bn.

Globally, the Volkswagen Group delivered 2.7 million vehicles to customers in the first quarter. This means an increase of 7.4% compared with the prior-year period. In March, the Group recorded more than one million deliveries, marking the highest number of unit sales in a single month so far.

“The first quarter results represent a good start for the new fiscal year. The annual press conference already addressed the topic that the new standardized vehicles test procedure WLTP will pose a great challenge for the entire automotive industry in the second half of the year,” said Frank Witter, member of the board of management, responsible for Finance and IT.

“Our net liquidity in the automotive division remains robust at more than €24bn. We are confident that we will reach our financial as well as strategic goals for this year.”