The sharp drop in profits at Volkswagen and Porsche is weighing heavily on their major shareholder, Porsche SE.
On Wednesday, the holding company reported a net loss of €1.1 billion. Excluding impairments on its two main investments, the adjusted profit stood at €484 million—down from €1.1 billion a year earlier. Porsche described the situation as "currently challenging for both core holdings." Fierce competition in China, coupled with weakening demand for luxury vehicles in the country and the trade policies of U.S. President Donald Trump, caused profits at both automakers to tumble between January and March.
Meanwhile, the holding company's debt rose by €100 million to €5.3 billion, attributed to investments and financing costs. Porsche SE holds a majority stake in Volkswagen as well as 25 percent plus one share in Porsche. The company also owns minority stakes in technology firms, including the space startup Isar Aerospace. Porsche SE stated that it intends to continue its diversification strategy. "We are focusing on mobility and industrial technology, but our investment focus is not limited to that," said Lutz Meschke, head of investment management. Most recently, Porsche participated in a funding round for drone manufacturer Quantum Systems.
At the annual press conference, Porsche SE CEO Hans Dieter Pötsch announced that the company is seeking to add another core holding to its main investments. He specifically highlighted the defense and infrastructure sectors, which could benefit from the German government's multi-billion euro investment program.
(Reporting by Christina Amann; editing by Philipp Krach. For inquiries, please contact our newsroom at Berlin.Newsroom@thomsonreuters.com (for politics and economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)
