Porsche profits
March 16, 2011
As much of the world's economy accelerates, Porsche has found its way into record profits. It's a welcome change for the company, which lost 454 million euros ($634 million) during its 2009/10 fiscal year.
Over the past two years, Porsche has struggled with debt, legal problems and a botched takeover attempt of Volkswagen (VW), in addition to the recession.
But in its five-month truncated 2010 fiscal year, designed to bring its numbers into alignment with VW accounting practices, Porsche's holding company netted about 1.1 billion euros after taxes. The majority of that windfall, 969 million euros, was generated by its 32.2 percent stake in VW.
The brick-and-mortar Porsche automobile company, which is slated to become the tenth brand in the Volkswagen lineup, delivered a 17.8 percent operating return over the same period. It sold 40,446 vehicles, an increase of 56.6 percent.
Porsche's Chief Financial Officer Lutz Meschke, said: "With this yield on sales and cash flow we've been able to make gains, and thereby underscore the financial solidity of the company."
Problems remain
However, before Porsche becomes fully integrated into VW, the Stuttgart-based sports car manufacturer needs to overcome some legal problems. It faces an insider trading probe into former chief Wendelin Wiedeking and former CFO Holger Härter in Germany.
Porsche is also struggling under substantial debt, which exceeded 11 billion euros after the 2009 resignations of Wiedeking and Härter. That figure is now down to 6 billion, and a capital increase planned for May, at the latest, should bring it down further.
Current Porsche chief Matthias Müller recently said he wants to ramp up production to sell as many as 200,000 sports cars and sports utility vehicles annually - more than double what the company currently sells.
Porsche is placing its hope in the small Cajun SUV, which is due to enter production in Leipzig in 2013.
Author: Gerhard Schneibel (dpa, Reuters)
Editor: Sam Edmonds