Porsche's profit drops 15% as downturn erodes demand
- Source: Shanghai Daily
- [09:10 June 22 2009]
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By Patrick McGroarty
Auto maker Porsche SE said yesterday that its nine-month profit dropped 15 percent to 4.6 billion euros (US$6.4 billion), excluding its holdings of Volkswagen AG, as the global economic crisis hit demand for new cars.
The Stuttgart-based luxury car maker said its sales from August 1, 2008 to April 30 this year and VW's sales in the first three months of 2009 had fallen by a combined 27.6 percent, or 53,635 vehicles, against the same periods a year earlier.
Together VW and Porsche sales came in at 28.4 billion euros for the two periods.
Porsche increased its stake in VW to some 51 percent at the beginning of 2009, and it was the first time the two car makers reported sales and profits jointly.
In a statement, Porsche said its profits were hurt by falling demand for new cars as a result of the economic crisis.
"In the first nine months of the ongoing fiscal year, the Porsche subgroup could not avoid the downward trend that has overtaken the worldwide automobile industry," the statement said.
Sales of its mainstay 911 dropped 18.2 percent to 20,254 in the nine months ended April 30, while sales of the Cayenne SUV dropped by the largest margin, diving 46.7 percent to 8,692 vehicles.
High financing costs are also dragging on Porsche.
The company carries some 9 billion euros in debt from its recent VW share increase and is looking for an outside investor to pay down that burden.
The prime minister of Qatar confirmed on Wednesday that his nation's main sovereign wealth fund is eyeing a stake in Porsche. He refused to disclose the terms of the deal, which he said would be announced in two weeks to three weeks.
Shares of VW fell more than 3 percent shortly after markets opened yesterday morning in Frankfurt, to 224.29 euros.
Shares of Porsche were down 0.2 percent to 44.50 euros.