Porsche SE Slashes Annual Targets Amid Weak Core Investment Results
Porsche Automobil Holding SE has revised its annual targets downward due to disappointing results from its core investments. The company's adjusted forecast now stands at 1.6 to 3.6 billion EUR, a significant decrease from the previous estimate of 2.4 to 4.4 billion EUR.
In the first half of the year, Porsche SE's adjusted consolidated result was 1.1 billion EUR, a substantial drop from the previous year. This was largely due to lower contributions from Volkswagen and Porsche AG, which provided 1.2 billion EUR and 100 million EUR in operating profit respectively. The company's net debt at the end of June was 4.9 billion EUR, leaving it with limited financial flexibility.
Despite this, Porsche SE has a cash balance of 2.6 billion EUR, which it could use for new investments in sectors such as infrastructure, software, or defense. However, the dividends from VW and Porsche AG in 2026 are expected to be around 1 billion EUR, securing the holding company's dividend of 1.91 EUR per share but offering little room for growth. A change in the dividend policy of the core investments could further exacerbate Porsche SE's situation.
Unlike some of its competitors, Porsche SE remains closely tied to VW and Porsche AG, with a discount to the net asset value of 15%. This is in contrast to Exor, which has a discount of 53%. Porsche SE's unique shareholder structure, where voting rights are fully held by non-listed shares controlled by Volkswagen and Porsche families, allows its management to operate with significant flexibility and creative freedom, free from the influence of activist investors. However, this structure also exposes the company to risks from potential legal disputes, currency fluctuations, and the volatile stock prices of VW and Porsche AG.
Porsche Automobil Holding SE has adjusted its annual targets downward due to weaker results from its core investments. While the company has cash reserves that could be used for new investments, its financial flexibility is currently limited. The company's future depends on the performance of its core investments and the management's ability to navigate the risks associated with its unique shareholder structure.
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