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May 12, 2020

Porsche increases VW holding, Q1 profit falls

Porsche Automobil Holding SE (Porsche SE) has increased its holding of ordinary shares in Volkswagen AG to 53.3%.

By Olly Wehring

Porsche Automobil Holding SE (Porsche SE) has increased its holding of ordinary shares in Volkswagen AG to 53.3%.

Between 17 March and 20 April 2020, it acquired 0.2% of the VW shares in capital market transactions for EUR81m, of which EUR26m was booked in the first quarter. This latest purchase of ordinary shares highlights Porsche SE's unwavering commitment to the Volkswagen Group.

Citing the global Covid-19 pandemic as the main factor, Porsche said its first quarter after tax profit of EUR99m was down on EUR1.2bn a year ago.

Profit from the investment in VW was EUR108m, down from EUR1.22bn.

The Intelligent Transport Systems (ITS) segment generated Q1 revenue of EUR26m, up slightly from EUR25m in Q1 2019.

Segment after tax loss of EUR5m compared to a EUR4m loss in the first quarter of 2019. This contains effects of a EUR2m loss from the continuation of the purchase price allocation, Porsche said.

Net liquidity increased slightly to EUR568m from EUR553m at the end of Q4 2019.

Cash outflows from the acquisition of ordinary shares in Volkswagen were largely counterbalanced by cash inflows from tax refunds including accrued interest, the company said.

Both Porsche and VW have withdrawn their 2020 outlooks due to COVID-19 uncertainty.

"Business development at [VW Group] is still subject to an unusual degree of uncertainty which in turn materially restricts forecasting ability at [Porsche SE]," a statement said.

"The executive board… is therefore unable at present to forecast the group result after tax with sufficient certainty.

"Despite current uncertainties, a positive group result after tax is nevertheless expected for the fiscal year 2020."

The annual general meeting originally planned for 19 May 2020 was cancelled.

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