Porsche SE's Net Profit Declines 84% in H1 FY 2009/10

Porsche Automobil Holding SE, the company that controls the sports car company Porsche AG and which was previously being used as the vehicle for the company's takeover attempt of the Volkswagen (VW) Group, posted an 84% year-on-year (y/y) decline in net profit to 871 million euro during the first half of the company's financial year (FY) from 1 July 2009 to 31 December 2009. However, this large decline in net profit had more to do with accounting effects than the actual operating performance following the after-effects of the failed attempt to acquire and maintain a controlling stake in Europe's largest passenger carmaker. Porsche said in a press release that it still expects negative earnings before tax for the full FY as a result of accounting effects, although some of these effects will offset each other. One of the main influences on Porsche SE's full-year financial results will be the deconsolidation of the VW Group from Porsche SE which occurred on December 2009 and the deconsolidation of the Porsche Zwischenholding GmbH group, which mainly comprises the carmaking side of the business Porsche AG. These structural changes have already been included in Porsche SE's six-month report. With Porsche now on its way to becoming fully consolidated within the VW Group by 2011, the company has sold a 49.9% stake in Porsche Zwischenholding GmbH to VW. As a result, the holding company Porsche SE received a figure of 3.9 billion euro which has already mainly been used to pay off debt, with Porsche's SE's net debt now having been reduced to 6.1 billion euro.

However, on the operating side of the business, which again mainly comprises Porsche AG's activities, the company did actually report some positive results. Porsche AG posted an operating profit during the period of 329 million euro, which translated to an operating margin of 10.4%. The unit's revenue also saw a positive increase of 3.7% y/y with sales rising to 3.16 billion euro. However, this was in spite of unit sales declining further still during the period to 33,670 units, suggesting a higher value model mix during the period in question. This was probably the result of this is period corresponding with the launch of the Panamera sports sedan. The Panamera sold 8,326 units between its launch in September 2009 and the end of the reporting period on 31 January. The Cayenne remained Porsche's best selling model with 13,454 units sold, representing a 19.8% y/y decline on the period during the previous year. Unit sales of the 911 came to 7,493 units (down 44.7%). Unit sales of vehicles from the Boxster model series, including the Cayman models, recorded 11.3% growth to 4,397 vehicles. Porsche stated that it continues to assume that unit sales for the full fiscal year 2009/10 will exceed the prior-year figure of 75,238 vehicles.

Outlook and Implications