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Porsche AG, the sports-car maker being purchased by Volkswagen AG (VOW), said first-half profit jumped 21 percent on demand for a new generation of the 911.
Operating profit rose to 1.26 billion euros ($1.55 billion) from 1.05 billion euros a year earlier, the Stuttgart, Germany- based company said in a statement today. Revenue increased 29 percent to 6.76 billion euros.
“We offer our customers outstanding sports cars that live up to the highest demands,” Matthias Mueller, the brand’s chief, said in the statement. “This way, we can stay in the success lane even in economically difficult times.”
Porsche’s profit gain comes as the European auto market heads for a fifth straight annual decline. The slowdown has prompted PSA Peugeot Citroen (UG) and General Motors Co. (GM) to consider shutting factories in the region, while Ford Motor Co. (F) warned that its European losses could exceed $1 billion this year. Porsche today forecast higher profit this year, even as it increases spending on new models.
“The new 911 generation provided a good tailwind that you can see clearly in the figures,” said Marc-Rene Tonn, an M.M. Warburg analyst based in Hamburg. “Operating profit came in a bit better than expected. The margin level is very pleasing.”
VW, based in Wolfsburg, Germany, agreed on July 4 to purchase a 50.1 percent stake in the brand from Porsche SE for 4.46 billion euros, assuming full ownership of the sports-car maker. The transaction is due to close next week, VW Chief Financial Officer Hans Dieter Poetsch said yesterday.
Adding Porsche to its portfolio of luxury brands that include Audi, Bentley and Lamborghini may bolster VW Chief Executive Officer Martin Winterkorn’s effort to overtake Toyota Motor Corp. (7203) and GM to become the world’s largest automaker.
“The operating business of Porsche looks very strong,” said Frank Schwope, a Hanover-based analyst at NordLB. “Volkswagen can look forward to adding another very attractive daughter to its family of brands next week.”
Porsche posted a profit margin of 18.7 percent in the first half, beating VW’s 6.8 percent return on sales. VW said yesterday that Porsche’s profit contribution will mainly be consumed by charges this year.
Deliveries climbed 23 percent to 68,940 vehicles on demand for the updated 911 sports car, which surged 43 percent. Sales of the Panamera four-door coupe jumped 31 percent, while deliveries of the Cayenne sport-utility vehicle climbed 25 percent. Porsche introduced a new version of the Boxster roadster in April. Porsche has forecast deliveries to rise at least 10 percent this year.
Volkswagen and Porsche agreed to combine in 2009 after Porsche SE’s failed attempt to take over Europe’s biggest carmaker. Backed by VW, Porsche plans to sell 200,000 vehicles a year by 2018. The brand will expand its lineup with the Macan compact sport-utility vehicle, which starts production in 2013. It will also add the 918 Spyder, a limited-run hybrid super car that will be Porsche’s most expensive model ever when deliveries start late next year.
The Porsche SE holding company still owns 50.7 percent of VW common stock and is considering investing in energy trading and other activities with the proceeds from the sale of the sports-car business.
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