GERMANY: Porsche result escalates due to VW stake
Porsche has today published results for the first six months of 2006/7 financial year, showing that pretax profit jumped to from EUR 278m to EUR1.59bn as a result of extraordinary income from its 27.3% stake in Volkswagen.
In a letter to shareholders, Dr. Wendelin Wiedeking, CEO, and Holger P. Härter, CFO of Porsche, said that Porsche has invested four billion euros in taking the stake in Volkswagen, and that the investment has increased in value by more than a billion euros since it first started acquiring shares.
The executives said that Porsche's role will be strengthened when the 'VW Law' that expires in the near future, following a recent ruling from the European Court of Justice. The ruling found that the law that enshrines a cap on voting rights to 20% contravenes European Law. Porsche is expecting to be able to exercise its full shareholder rights in proportion to its shareholding by the end of the year.
Unit sales at Porsche fell seven percent in the first six months to 39,295. This was due to a changeover to the new Cayenne model. Unit sales at Porsche fell seven percent in the first six months to 39,295. This was due to a changeover to the new Cayenne model.
After adjustment of the prior- year figures to account for the sale of CTS Fahrzeug-Dachsysteme GmbH, sales revenue declined marginally by 1.4%.
The powerhouses behind Porsche's success in the current fiscal year will be the two sports car series. Sustained positive impetus from the Cayenne series is not expected to ensue until the coming 2007/2008 fiscal year. The next boost to growth is likely to be the market launch of the Panamera in 2009.