Porsche Net Profits UP in First Half of 2007

Porsche net profits up in first half of 2007 David Rising / Associated Press The Detroit News BERLIN -- Luxury sports car maker Porsche AG confirmed Monday that net profit soared in the fiscal first half of 2007, boosted primarily by a gain from its stake in Volkswagen AG. Net profit rose to euro1.14 billion (US$1.5 billion) in the half ending Jan. 31, higher than the euro1.05 billion (US$1.38 billion) preliminary figure reported in January at the company's annual general meeting, compared to euro170 million in the same period a year earlier. Porsche's 27.3 percent Volkswagen stake contributed a more than a euro1 billion (US$1.32 billion) gain while the revaluation of Volkswagen shares held by Porsche yielded another euro520 million (US$684.48 million), the company said. "Since the start of our investment in Europe's biggest automotive group around a year and a half ago, Porsche's share price has risen by 50 percent and Volkswagen's share price has doubled," the company said in a statement. "Any initial doubtful voices in relation to our shareholding in VW have long since faded." Sales fell to euro3.07 billion (US$4.04 billion) from euro3.11 billion -- slightly better figures than initially reported -- as Porsche sold 39,265 cars, down from 42,230 in the same period a year earlier. Porsche attributed the overall 7 percent drop in unit sales to the model change for the Cayenne SUV. Production of the first generation Cayenne was discontinued in November 2006 with sales of the new model not starting in Europe and Asia until late February. On the other hand, sales growth of the mainstay 911 and Boxster series were up 15.7 percent and 19.6 percent respectively. Earnings before taxes rose to euro1.59 billion (US$2.09 billion) after a figure of euro278 million in the prior-year period and Porsche reiterated its expectation of surpassing 2006's pretax profit of euro2.1 billion (US$2.76 billion) in fiscal 2007. "Porsche is more optimistic for the 2006-2007 fiscal year as a whole than it was at the beginning of the fiscal year." the company said. "Even the difficult market environment in the USA does not overshadow this optimism. Porsche aims to match the high prior-year level of unit sales and sales revenue with the growth markets in eastern Europe and Asia contributing substantially to sales." It said, for example, that it was increasing the number of dealers in China from 12 to 20 and was "confident that it can double unit sales in China this year by comparison with the previous year, during which roughly 1,920 vehicles were sold." No quarterly figures were released. Porsche shares were down 3.3 percent in midday trading in Frankfurt at euro936 (US$1,232.06) amid a general drop in the market.