Porsche Automobil Holding SE (Porsche SE) has projected a loss of €20bn ($21.7bn) in for the fiscal year 2024, primarily due to significant non-cash impairment charges.
The anticipated loss in group result after tax follows the conclusion of impairment tests on its investments in Volkswagen AG and Dr. Ing. h.c. F. Porsche AG.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The impairment tests have led to a considerable reduction in the carrying amounts of Porsche SE’s investments.
Specifically, the impairment of the investment in Volkswagen is recorded at minus €19.9bn, aligning with the lower end of the previously communicated range of minus €7bn to €20bn.
The impairment on the investment in Porsche AG stands at minus €3.4bn, which is within the expected range of minus €2.5bn to minus €3.5bn.
Porsche SE said that these impairment losses are non-cash effective and reflect adjustments in the value of Porsche SE’s holdings rather than actual cash outflows.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn a press statement, Porsche SE said: “In the annual financial statements of Porsche SE under German commercial law, there is only an impairment of the carrying amount of Porsche SE’s investment in Porsche AG in the amount of minus €2.9bn. For the fiscal year 2024, this results in an expected annual loss of approximately minus €1.5bn.”
The company initially disclosed these impairments in December 2024, which reflect a notable reduction in market value for both Volkswagen and Porsche AG.
Porsche SE holds a 31.9% stake in Volkswagen and a 12.5% stake in Porsche AG.
In light of the impairments, which are non-cash effective, Porsche SE had withdrawn its profit forecast.
Despite these losses, the company’s net debt as of 31 December 2024 is expected to be around €5.2bn, staying within the anticipated range.
In a press statement, “Porsche SE said: In the annual financial statements of Porsche SE under German commercial law, there is only an impairment of the carrying amount of Porsche SE’s investment in Porsche AG in the amount of minus 2.9 billion euros. For the fiscal year 2024, this results in an expected annual loss of approximately minus 1.5 billion euros.”
Despite the impairments, Porsche SE’s net debt as of 31 December 2024, is projected to be approximately €5.2bn, which is within the anticipated parameters.
Porsche SE management board remains optimistic about the company’s ability to distribute a dividend for the fiscal year 2024.
Last month, Reuters reported that Porsche was considering additional layoffs in Germany by 2029, following a review of an ongoing programme that was deemed insufficient.
The firm plans to cut positions by 15% at its main sites in Stuttgart-Zuffenhausen and Weissach.
