Porsche cuts debt, holds car sales

Porsche SE's falling debt and steady sportscar sales helped offset news of a €0.7 billion ($867 million) net loss in the first nine months, boosting its shares on Friday.

The Stuttgart-based maker of the iconic 911 sportscar said it anticipates a loss of under €1bn for the full year to end July, weighed down by restructuring costs and a high level of debt as the company seeks to unwind its failed takeover of Volkswagen.

Volkswagen, which took a 49.9 per cent stake in the Porsche Zwischenholding car unit as part of a multi-stage rescue of Porsche, was forced to step in after Porsche's own takeover attempt of Volkswagen backfired, collapsing under debts of more than €10bn.

Volkswagen stepped in last year to inject €3.9bn in Porsche Zwischenholding, helping reduce net debt at the Porsche SE group to €6bn as of April 30.

Porsche reiterated in a statement that it plans a capital increase in the first half of 2011, a key step towards the merger between Porsche SE and Volkswagen. Porsche still holds a majority voting stake in VW.

Nine-month sales to the end of April at its sportscar business held close to steady at 53,605 vehicles, while revenue climbed nearly 12 per cent to €5.2bn.

"Operational performance of Porsche AG is mainly in line with our expectations. The fact that revenues outpace vehicle sales is clearly positive," DZ Bank analyst Michael Punzet writes, keeping a "buy" rating.

Porsche SE posted a €4.4bn pretax loss for the fiscal year to end-July last year due entirely to writedowns on its VW hedges, when it let the air out of their bloated valuation just prior to unloading the derivatives package to Qatar.