STUTTGART (dpa-AFX) - The current year will be even more expensive than expected for sports car manufacturer Porsche, which is part of the VW Group, due to US tariffs, the sluggish ramp-up of electric vehicles, and poor business in China. Porsche CEO Oliver Blume unexpectedly lowered the DAX-listed company's financial outlook on Monday evening. This means that sales and profits are likely to be even lower this year than already forecast. The long-ailing share price fell after trading hours.
On the Tradegate trading platform, the stock fell 2.8 percent compared to the Xetra closing price. This extends the stock's losses: over a twelve-month period, the share price has lost almost half its value. Volkswagen preferred shares traded half a percent below their Xetra closing price in after-hours trading on Tradegate on Monday.
Management now expects sales for the current year to be between €37 billion and €38 billion, as announced by the Stuttgart-based company. Previously, the group had been aiming for a figure between €39 billion and €40 billion. The target range for the operating return on sales was lowered by 3.5 percentage points to between 6.5 and 8.5 percent.
In the previous year, Porsche had achieved sales of €40.1 billion and an operating margin of 14.1 percent. Blume's ambitions are actually quite different: in the long term, the company aims to retain more than 20 percent of sales as operating profit before interest and taxes.
The downward revision of the outlook reflects, among other things, the fact that Porsche is now taking into account US tariffs on imports from the EU – although, given the uncertain situation, these will initially only apply to April and May. At present, it is not yet possible to make a reliable assessment of the impact on the fiscal year, the company said.
Porsche does not have its own production facilities in the US; the cars are imported from Europe. US President Donald Trump had imposed an additional 25 percent tariff on car imports from the EU.
The additional costs for Porsche are mainly due to the fact that the Swabian company no longer wants to continue expanding the production of high-performance batteries at its subsidiary Cellforce on its own. As a result of this and other burdens, Blume now expects special expenses of 1.3 billion euros this year, rather than just 0.8 billion. These were due because Porsche plans to cut around 3,900 jobs, including temporary positions, and is investing more money in the development of combustion engines and hybrids.
In China, the range is also being further trimmed in response to weak sales. In the first quarter, Porsche delivered just under 9,500 cars to customers in the People's Republic, 42 percent less than a year earlier. The continuing challenging market conditions and declining demand in the all-electric luxury segment are significantly slowing Porsche down.
However, because the company wants to forego as little margin as possible, no discounts will be offered to boost sales. Since wealthy customers in China are spending less on luxury goods and expensive cars due to the real estate crisis and the general economic situation in the country, Porsche is trying to divert the cars it produces to other regions of the world. The trade conflict in the US – also an important market for Porsche – therefore comes at an inopportune time for the company.
Porsche also has to dig deeper into its pockets to support suppliers. Porsche will present its figures for the first quarter on Tuesday (April 29)./men/tih/he
