Porsche Obtained Net Profit for First Half of 2007

In the news: Volkswagen's largest stakeholder and recipient of quality auto parts like Volkswagen window switch, Porsche AG has confirmed recently that it has obtained a net profit in the fiscal first half of 2007 brought about by the gain from its stake in VW.

The net profit achieved by Porsche reached 1.14 billion euros or $1.5 billion USD in the half ending January 31. The net profit obtained by Porsche for January was higher than the 1.05 billion euros or $1.38 billion USD preliminary figures that it has reported during the company's annual general meeting. It's also higher compared to the 170 million euros that Porsche has obtained in the same period a year earlier.

The stake of Porsche in Volkswagen amounting to 27.3 percent has contributed more than 1 billion euro gain while the revaluation of Volkswagen shares held by Porsche has yielded another 520 million euros. According to Porsche AG, "Since the start of our investment in Europe's biggest automotive group around a year and half ago, Porsche's share price has risen by 50 percent and Volkswagen's share price has doubled. Any initial doubtful voices in relation to our shareholding in VW have long since faded."

Porsche has also recorded a decline in sales to 3.07 billion euros or $4.04 billion USD from 3.11 billion euros which is a little better compared to the initially reported wherein Porsche sold 39,265 down from 42,230 in the same period a year earlier.

Porsche further stated that the overall 7% decline in sale is due mainly to the model change for the Cayenne SUV. It should be noted that production of the first generation Cayenne was stopped in November 2006 but new models are now lined up for sale in Europe and Asia. The 911 and Boxster series have continued to be strong in sales and were up by 15.7% and 19.6% respectively.

The earnings before taxes obtained by Porsche rose to 1.59 billion euros after only recording a figure of 278 million euros in the prior year period. Porsche has also expressed its expectation of surpassing its 2006 pretax profit of 2.1 billion euros for 2007. "Porsche is more than optimistic for the 2006-2007 fiscal year as a whole than it was at the beginning of the fiscal year. 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."