Porsche confirms big annual loss

Posted on November 13th, 2009 by News in Manufacturers, News

German sports carmaker Porsche has confirmed it made a big full-year loss, largely due to its unsuccessful attempt to take over Volkswagen.

Porsche abandoned its long-running attempt to buy VW, Europe’s largest carmaker, this summer, despite building a 51% stake in the company.

Instead, Porsche is set to become the 10th VW brand under a deal due to be completed by the end of 2011.

Porsche released a profit warning in July saying it had made a big loss.

The company reported a pre-tax loss of 4.4bn euros ($6.5bn; £3.9bn) for the year to the end of July, against an 8.6bn euros profit the previous year.

It did not release a net profit figure.

Taking out the impact of the VW takeover attempt, Porsche said it remained the “most profitable automobile manufacturer in the world”.

Porsche had to build up major debts to get a 51% stake in VW, only to fall short of the required 75% when it could not raise more funds due to the impact of both the global credit crunch and the slump in global car sales.

Source: BBC News

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