Porsche Automobil Holding SE (Porsche SE), the holding company of Porsche AG, forecasts that impairments on its stake in the luxury carmaker will nearly double, reaching between €2.5bn ($2.58bn) and €3.5bn ($3.63bn).
Earlier, Porsche SE expected impairment in range of €1bn to €2bn.
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The firm also anticipates writedowns related to its top shareholding in Volkswagen to potentially reach €20bn, expanding the previously expected range of €7bn to €20bn.
The expected impairments on Porsche AG’s stake are set to influence Porsche SE’s annual financial outcomes, however “to a lower extent”.
Despite these impairments, Porsche SE said it will not impact cash flow.
Porsche AG has projected that expenses for vehicle development and battery activities will affect its operating profit and automotive net cash flow by up to €800m in 2025, reported Reuters.
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By GlobalDataThe German luxury carmaker estimates sales revenue for 2025 to fall between €39bn and €40bn, with an automotive net cash flow margin of 7-9%.
Amid efforts to revive declining earnings and sales, particularly in the Chinese market, the board is considering expanding the product portfolio to include models with combustion engines or plug-in hybrids, alongside organisational adjustments.
Last week, discussions commenced within Porsche AG supervisory board to potentially terminate the contracts of chief financial officer Lutz Meschke and sales executive Detlev von Platen ahead of schedule.
In October, it was reported that Porsche plans to reduce costs due to a weakening economy and increased competition in China.
The company also cited a slower-than-anticipated transition to electric vehicles as a contributing factor to its current challenges.
These factors have compelled the automaker to reassess its product lineup, and costs.
