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Porsche sheds debt but expects yearly loss

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Porsche sheds debt but expects yearly loss
Photo: DPA
14:37 CET+01:00
The German luxury carmaker Porsche said on Wednesday that has paid down nearly half its mountain of debt but that it expects to suffer a net loss in its current fiscal year.

Porsche turned a profit in the first six months however, while maintaining a solid profit margin of 10.4 percent, company figures showed.

In the first half of its 2009/2010 fiscal year which began on July 1, Porsche made an operating profit of €329 million as sales gained 3.7 percent to €3.16 billion.

In January, the company had forecast a 3.3 percent drop in sales, but ended up with a profit margin that was "slightly better than our estimations," Merck Finck auto analyst Robert Heberger said.

The figures concern Porsche AG, which produces the group's models including the iconic 911 along with the Cayenne sports utility vehicle and new Panamera saloon.

Porsche AG, which is 49.9 percent owned by Volkswagen, sold 33,670 vehicles, a decline of 1.7 percent from the same period a year earlier however, with the decline concentrated in Europe and North America.

VW, the biggest European carmaker, bought its stake in Porsche for €3.9 billion and plans to acquire the remaining shares sometime next year.

The money helped Porsche SE, the parent holding company, to reduce its huge debt from more than €11 billion at the end of the 2008/2009 fiscal year to €6.1 billion as of the end of January.

Porsche's failed attempt to take over VW backfired, allowing the prey to become the hunter and resulting in a complex shareholding structure between the two groups.

Porsche SE, which currently owns Porsche AG plus 51 percent of VW's ordinary shares, posted a six-month net profit of €871 million.

But for the full year, the parent group forecast a net loss of between one and five billion euros, owing in part to the deconsolidation of holdings in VW and another Porsche unit, a statement said.

Accounting methods would account for part of the loss as well, it added.

In addition, Porsche "is not participating in the capital increase planned by Volkswagen for the first half of 2010," the statement said, which will dilute Porsche SE's stake in VW and cut the former's earnings further.

VW plans to raise up to €4 billion before buying the Porsche shares it does not already own and making the sports-car company its 10th brand.

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