Bloomberg News

Porsche First-Half Profit Jumps 59% as Cayenne Sales Double

August 01, 2011

(Updates with Panamera-model deliveries in fifth paragraph, comments from CFO starting in 11th and from CEO in last.)

Aug. 1 (Bloomberg) -- Porsche AG, the German sports-car maker that’s merging with Volkswagen AG, said first-half operating profit surged 59 percent as sales of its 58,000-euro ($84,000) Cayenne sport-utility vehicle more than doubled.

Earnings before interest and taxes rose to 1.07 billion euros from 675 million euros a year earlier as revenue gained 19 percent to 5.22 billion euros, the Stuttgart-based maker of the 911 sports car said today in a statement.

Backed by VW, Porsche aims to double deliveries to at least 200,000 cars and SUVs by 2018 as it adds new models and expands in emerging markets. Cayenne volumes surpassed 28,000 in the first half and the carmaker reiterated that it’s targeting group sales of more than 100,000 units this year, from 97,000 in 2010.

“Profit and margin are both above expectations,” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler who recommends buying the stock. “Porsche has excellent products with the Cayenne and Panamera and the overall environment for premium cars is very solid.”

China Surge

Sales rose fastest in China, surging 47 percent to 11,712 sports-cars and SUVs. While deliveries of the four-door Panamera dipped 3.2 percent in the half, they jumped 14 percent in June.

Porsche advanced as much 3.7 percent and was trading 1.7 percent higher at 54.60 euros as of 11:27 a.m. in Frankfurt. The stock has gained 6.9 percent this year, giving the carmaker a market value of 16.7 billion euros.

To sustain growth, Porsche aims to adjust rollouts to have at least one new product a year, sales chief Bernhard Maier said last month. The key model in 2011 will be the seventh generation 911, which debuts at the Frankfurt motor show next month. The revamped car will be more agile than the current version while selling for about the same 86,000 euros for the basic model.

The German manufacturer, which relies on the Cayenne for half of its deliveries, plans to increase production of the best-selling model by 10 percent to 20 percent starting next year. Demand for the SUV, which includes a Turbo version costing 121,000 euros, caused the waiting list to extend to as much as 12 months in markets including China.

Rollout Plan

Porsche’s model lineup with the 911, Boxster/Cayman, Panamera and Cayenne will be expanded by 2013 to include a compact SUV. In the same year, the company will add a limited series of the 918 Spyder hybrid, a 500-horsepower vehicle with a V8 engine and electric motors that has a top speed of 320 kilometers per hour (200 mph).

Porsche may also develop a supercar positioned higher than the 237,600-euro 911 GT2 RS, which currently marks the top end of the 911 lineup, Maier said last month. Variants of the Cayman and Boxster, plus extended-wheelbase and convertible versions of the Panamera, are also conceivable, the executive said.

Porsche AG Chief Financial Officer Lutz Meschke said today that the carmaker continues to aim for a “clearly” double- digit operating margin this year. The company’s operating margin in the first six months of 2010 was 15.4 percent.

“We were able to finance all investments through our cash flow” Meschke said in the statement. “That’s the result of our high profit-earning capacity and a very healthy cost structure.”

The company’s European sales rose 11 percent to 18,853 units, with more than one-third -- or 6,734 autos -- delivered in its German home-market, Porsche said. Sales in North America rose by one-quarter to 15,466 units.

“Porsche is able to benefit through a very attractive model range from high demand globally for sports cars in the premium segment,” Chief Executive Officer Matthias Mueller said in the statement.

The Porsche SE holding company, which has its own CEO and CFO, will report after-tax results for the first half tomorrow.

--Editors: Chris Jasper, Chad Thomas.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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