Porsche posts $6.6 billion USD loss

Porsche posts $6.6 billion USD loss

Porsche posts USD loss

Porsche, the once undisputed leader in the sports car segment, has proven that it’s not immune to the harsh effects of the economic crisis that has been sweeping the globe over the past year. Coming off record sales and profits last year, Porsche has announced that it made a $6.6 billion USD loss for the financial year ending July 31, 2009.

Despite sales dropping significantly across almost every model line, the biggest hit to the sports car company’s bottom line came with its failed attempt to takeover Volkswagen. This led to a massive write-down for the cash-settlement options on Volkswagen shares, which Porsche originally bought using debt.

Porsche is quick to point out that the write-down exercise wouldn’t actually affect the company’s actual cash flow, showing up instead as just an on-paper loss.

It should also be noted that the loss was reported by Porsche SE, the holding company of Porsche AG, which is the actual auto manufacturing division. Porsche AG has announced that its own operations still posted a significant margin in operating profit last year and remains the most profitable automaker in the world.

Porsche posts USD loss

Porsche, the once undisputed leader in the sports car segment, has proven that it’s not immune to the harsh effects of the economic crisis that has been sweeping the globe over the past year. Coming off record sales and profits last year, Porsche has announced that it made a $6.6 billion USD loss for the financial year ending July 31, 2009.

Despite sales dropping significantly across almost every model line, the biggest hit to the sports car company’s bottom line came with its failed attempt to takeover Volkswagen. This led to a massive write-down for the cash-settlement options on Volkswagen shares, which Porsche originally bought using debt.

Porsche is quick to point out that the write-down exercise wouldn’t actually affect the company’s actual cash flow, showing up instead as just an on-paper loss.

It should also be noted that the loss was reported by Porsche SE, the holding company of Porsche AG, which is the actual auto manufacturing division. Porsche AG has announced that its own operations still posted a significant margin in operating profit last year and remains the most profitable automaker in the world.

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