German carmaker Volkswagen said the net profit rose 20 per cent last year to €10.8 billion ($12.1 billion), but offered a cautious outlook for this year.

The maker of Volkswagen, Audi, Skoda and SEAT brand cars said yesterday that it increased its profit margins during 2014 and proposed to raise its dividend to shareholders.

For 2015, however, it saw a "persistently challenging market environment." It said sales would increase by at least four per cent, "depending on economic conditions."

The sales revenue rose 2.8 per cent last year to €202.5 billion ($227 billion). Volkswagen said it would raise its dividend to €4.8 ($5.3) per ordinary share, up from €4 ($4.4) in 2013.

It said its operating margins improved to 6.3 per cent from 5.9 per cent, reaching the upper range of its forecast for the year of 5.5 per cent to 6.5 per cent.-Reuters