Special Effects Significantly Boost Porsche ProfitsProvisional Half-Year Figures: Sports Cars Ensure Further Improved Model Mix
Stuttgart. Dr. Ing. h.c. F. Porsche AG, Stuttgart, is continuing its successful development. According to provisional figures, the manufacturer of sporting premium cars will show a pre-tax Group profit in the first six months of the current 2006/07 year of business
(1 August 2006 - 31 January 2007) of Euro 1,450.0 million, following Euro 277.8 million in the same period last year. The Group result after taxes is Euro 1,050.0 million (previous year: Euro 169.8 million). This was announced this Friday by the President and Chief Executive Officer of Porsche AG, Dr. Wendelin Wiedeking, at the General Meeting of
Dr. Ing. h.c. F. Porsche AG in the Porsche-Arena, Stuttgart.
The improvement of results is attributable, first, to the further enhancement of the model mix sold. The second factor is special effects resulting from the Porsche's investment in Volkswagen once again accounting for a significantly above-average upward surge of profits. Stock price hedging proceeds in conjunction with the acquisition of VW stock, for example, amounted to a substantial figure in the three-digit million-Euro range. In addition, the re-valuation of the Company‘s share in VW common stock now amounting to 27.4 per cent, accounting for a contribution of Euro 520 million, likewise had a positive impact on profits. Such re-valuation was necessary to reflect the significant increase in the value of the Company attributable to the increased value of VW stock. This re-valuation is however a single, non-recurring effect.
The result disclosed also considers burdens such as the cost of development of the four-door Panamera sports coupé amounting to a three-digit million-Euro figure. By contrast, the consolidated accounts consider only the result of VW's third quarter in 2006, since the figures for the final quarter 2006 are not yet available. These figures will thus enter Porsche's result for the full 2006/07 year of business.
A major factor affecting Porsche in the period under report was the changeover to the new Cayenne. Hence, revenue in the first six months of the current year of business – taking CTS into account – shows a minor decrease by 2.9 per cent to Euro 3.02 billion, with sales dropping by
5.9 per cent to 39,750 units. These included 10,225 units of the Cayenne, equal to a decrease by 39.8 per cent. Production of the first generation of this model series ended in November and the new Cayenne will not be introduced in Europe and Asia until 24 February, with introduction on the American continent on 3 March. This explains why Porsche's global sales figures will show a decline in January and February, since in that period no Cayennes will be delivered. The sports car model series, on the other hand, show a positive impact on sales, with sales of the 911 amounting to 17,340 units, equal to an increase by 15.7 per cent. Sales of the Boxster and Cayman, in turn, picked up by 21.5 per cent to
The distribution of sales by regions shows how difficult the US market has become: in North America sales were down by 19.2 per cent to 14,570 units, while in Germany Porsche's sales were up slightly by
0.9 per cent to 5,540 units, in the rest of the world by an even more significant 5.0 per cent to 19,640 units.
Porsche now feels more optimistic for the entire 2006/07 year of business: The Company intends to once again reach the high level of sales achieved in the previous year. Growth markets in Eastern Europe and Asia will make a significant contribution to this positive development. In Russia, for example, Porsche's sales and distribution network is growing in the current year of business to 16 dealers, as opposed to only ten in the previous year. The process of expansion in China is even greater, with the number of Porsche dealerships increasing from
12 to 20. Porsche is therefore confident that sales figures in China will be doubled this year in comparison with the previous year, when sales amounted to some 1,920 units. The pace of development in these markets is limited by the availability of qualified service and sales personnel which has to be recruited and appropriately trained.
In the current year of business the Company's successful development is borne out by the two series of sports cars. Sales of the 911 model series alone are expected to reach 36,000 units, among them some 6,000 Turbos. The model mix shows a clear preference in the market for high-priced models. The Cayenne model series is not expected to generate a positive impact until the 2007/2008 year of business when the Cayenne for the first time becomes available for a full business year in the market. Assuming there are no surprises with VW or with the VW stock price, Porsche is confident to be able to achieve the previous year's result of Euro 2.1 billion in the current year of business.