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Losses stem from its failed bid to takeover Volkswagen AG, Porsche's car division remains profitable
Porsche Automobil Holding SE has reported a pre-tax loss of €4.4 billion ($6.6 billion) for its 2008-2009 fiscal year.
Porsche Automobil Holding SE is the parent company of Porsche AG, the luxury automaker. Porsche SE's losses mostly stem from its failed bid to take over Volkswagen AG.
Porsche SE had been buying up VW stock over the last couple of years by borrowing cash in an attempted take-over of its much larger rival. But Porsche SE's gamble for a hostile purchase of Volkswagen AG backfired when it found itself overextended debt-wise as the credit markets hit a crisis in the financial meltdown of late 2008. Porsche SE was then forced to merge with VW this past summer.
In a press release announcing the loss, Porsche SE also reported that its car division, Porsche AG, "remains the world's most profitable automaker," with a profit margin in the double-digits.
Source: Porsche Automobil Holding SE
Press Release (Click to expand)
At its meeting today, the Supervisory Board of Porsche Automobil Holding SE ratified the financial statements reporting a loss before tax of 4.4 billion Euro for the fiscal year 2008/09 (ending 31 July 2009). Last year the group reported a profit before tax of 8.6 billion Euro. The primary factor in the loss reported by Porsche SE was the write-down recognized for the cash settlement options to Volkswagen shares. This impairment loss was recorded at the end of the reporting period and paved the way for the sale of the substantial part of the options to the Emirate of Qatar.
The result was also influenced by the hidden reserves and liabilities identified in the course of the purchase price allocation for the shareholding in Volkswagen. The purchase price allocation became necessary after the number of ordinary shares in Volkswagen AG held by Porsche SE exceeded the 50 percent threshold on 5 January 2009. As a result, the Wolfsburg-based automotive group was fully consolidated in the consolidated financial statements of Porsche SE for the first time. In the process, the fair value of the assets and liabilities acquired in the combination was determined for inclusion in the financial statements of Porsche SE.
In connection with these accounting losses, Porsche had already clearly announced in a release on 29 July 2009 that the factors mentioned above could lead to a pre-tax loss of up to five billion Euro for the fiscal year 2008/09.
Dr. Ing. h.c. F. Porsche AG still shows a double-digit margin in the operating profit. Therefore, Porsche remains the most profitable automobile manufacturer in the world.
After drawing one billion Euro from the revenue reserves, the financial statements of Porsche SE for the year ending 31 July 2009, prepared in accordance with the German Commercial Code, report a net profit available for distribution of 8.23 million Euro. The Executive Board and Supervisory Board of Porsche SE propose to the Annual General Meeting, which is scheduled to be held in Stuttgart on 29 January 2010, that the total net profit available for distribution be paid out as a dividend. This would constitute a dividend of 0.05 Euro per preference share and 0.044 Euro per ordinary share.
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Hero Sina
November 13, 2009 6:28 PM
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