Porsche AG posts 21% hike in first-half operating profit to EUR1.26 billion

Article by Anita Panait, on July 28, 2012

Porsche AG posted a 21-percent increase in operating profit for the first half of 2012 to EUR1.26 billion ($1.55 billion) from EUR1.05 billion for the same period in 2011. The company also posted a 29-percent surge in revenues in the review period to EUR6.76 billion. The carmaker’s operating profit soared primarily thanks to the strong demand for its new-generation Porsche 911.

Matthias Mueller, Porsche’s chief executive, remarked that since the carmaker offers outstanding sports cars that “live up to the highest demands,” the company could still achieve success even in economically difficult times. It should be noted that Porsche posted an increase in operating profit despite competing in Europe, where the demand for vehicles has been declining for the past four years.

This European economic decline has prompted rivals PSA/Peugeot-Citroen and General Motors to consider closing plants in the continent and has set off Ford to warn that its losses in the region could exceed $1 billion in 2012.

In contrast, Porsche predicts that it would post a higher profit for 2012 while increasing spending on new models. Porsche AG is bound to see its ownership structure change next week when the Volkswagen Group completes its full takeover of the brand, according to the latter’s Chief Financial Officer Hans Dieter Poetsch.

Volkswagen Group reached a deal on July 4 to acquire a 50.1 percent stake it currently does not own in the brand from Porsche SE for EUR4.46 billion. VW’s takeover of Porsche AG is seen as part of VW chief executive Martin Winterkorn's goal to become the largest carmaker in the world, effectively overtaking rival giants Toyota Motor Corp. and GM to become the world's largest automaker.

Topics: porsche, profit

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