FRANKFURT — Porsche , the maker of the 911 sports car, yesterday said business would remain tough even as an increase in orders signalled a possible turnaround within a year.
The car maker posted its first full-year loss since 1994 after writing down the value of options on shares of Volkswagen, the company it is merging with after a failed takeover bid. Sales continued to decline in the financial first quarter.
“Our business will remain very difficult in the coming months,” Michael Macht, CEO of Porsche’s automotive unit, said in Stuttgart yesterday. “However, I’m cautiously optimistic on the outlook for 2010.”
The net loss in the 12 months to July 31 was à 2,52bn , compared with net income of à 6,29bn a year earlier, the Stuttgart -based company said.
Porsche rose as much as 2,4% in German trading and was up 1,7% to à 51,58 yesterday. The stock has declined 1,5% this year, compared with a 65% drop at Volkswagen.
VW shares were down 1,6% yesterday.
Sales continued to slide between August and last month, while orders increased 25% to about 20000 cars and sport-utility vehicles, Macht said.
“It seems as if demand for Porsche vehicles is slowly reviving,” he said.
Porsche’s debt almost quadrupled to à 11,4bn as of July 31 from à 3,1bn a year earlier after the company accumulated 51% of Volkswagen stock and options on a further stake of about 23%, the company said yesterday. Porsche dropped the takeover bid in May in favour of a combination that would turn the manufacturer into the 10th brand at VW, Europe’s biggest car maker.
Porsche said its financial-year operating profit was à 1,9bn, with à 1,2bn of that amount derived from Volkswagen.
It might post another loss in the year ending July 31 for “technical reasons” related to the transfer of ownership of the automotive division to VW, chief financial officer Hans Dieter Poetsch said.
Porsche and Volkswagen last Friday approved legal documents that allow Wolfsburg-based VW to proceed with buying Porsche’s car making division.
VW said on October 20 that it would pay à 3,9bn for a 49,9% stake by the end of this year in the first phase of a combination to be completed by 2011.
Ratification allows VW CEO Martin Winterkorn to run Porsche’s holding company and Poetsch to take the same position on the management board.
Volkswagen has said it plans to invest à 25,8b n in its automotive business in 2010 -12. About à 13,3b n of spending will go towards creating vehicles and redesigning existing ones.
Our business will remain very difficult in the coming months. However, I’m cautiously optimistic on the outlook for 2010