By Amir Orusov
(Reuters) -Holding company Porsche SE, Volkswagen’s largest shareholder, cut its full-year profit forecast on Wednesday, weighed down by the German automaker’s weak first-half performance, while reiterating its plans to invest in the defence sector.
WHY IT’S IMPORTANT
U.S. tariffs have dealt a heavy blow to global automakers, forcing them to book billions of dollars in losses, issue profit warnings, slash forecasts and raise prices.
Although the European Union has reached a trade deal that brought U.S. tariffs on EU-made cars down to 15% from the previously imposed 25%, some analysts remain cautious as the duty is far higher than the 2.5% rate before Trump launched his trade offensive.
German auto and car parts makers are meanwhile exploring the defence sector as a potential growth avenue as Europe ramps up military spending.
KEY QUOTES
“Against the backdrop of a changing geopolitical situation and growing security policy requirements, Porsche SE sees considerable development potential in the defense and security sector and intends to capitalize on this,” the company said in a statement.
“With regard to portfolio investments, our aim is to increase our involvement in the defense and defense-related sectors while maintaining our core focus on mobility and industrial technology,” Chairman Hans Dieter Poetsch said.
BY THE NUMBERS
Porsche SE expects the adjusted group result after tax to land between 1.6 billion and 3.6 billion euros ($1.9 billion and $4.2 billion) in 2025, compared with 2.4 billion to 4.4 billion euros anticipated earlier.
It reported an adjusted net profit of 1.1 billion euros for the first half of the year, down by nearly a half from last year’s 2.1 billion.
CONTEXT
Porsche SE, controlled by the Porsche and Piech families, is highly exposed to Volkswagen’s performance through its nearly 32% stake, which influences its valuation, earnings and financial guidance. It also owns 12.5% of luxury carmaker Porsche AG, with much of the rest held by the Volkswagen Group.
For full-year 2024, Porsche SE had disclosed impairments of 19.9 billion euros on Volkswagen and 3.4 billion euros on Porsche AG.
($1 = 0.8561 euros)
(Reporting by Amir Orusov in Gdansk; editing by Milla Nissi-Prussak)
