Porsche sheds debt but expects yearly loss

The German luxury carmaker Porsche said on Wednesday that has paid down nearly half its mountain of debt but that it expects to suffer a net loss in its current fiscal year.

Porsche sheds debt but expects yearly loss
Photo: DPA

Porsche turned a profit in the first six months however, while maintaining a solid profit margin of 10.4 percent, company figures showed.

In the first half of its 2009/2010 fiscal year which began on July 1, Porsche made an operating profit of €329 million as sales gained 3.7 percent to €3.16 billion.

In January, the company had forecast a 3.3 percent drop in sales, but ended up with a profit margin that was “slightly better than our estimations,” Merck Finck auto analyst Robert Heberger said.

The figures concern Porsche AG, which produces the group’s models including the iconic 911 along with the Cayenne sports utility vehicle and new Panamera saloon.

Porsche AG, which is 49.9 percent owned by Volkswagen, sold 33,670 vehicles, a decline of 1.7 percent from the same period a year earlier however, with the decline concentrated in Europe and North America.

VW, the biggest European carmaker, bought its stake in Porsche for €3.9 billion and plans to acquire the remaining shares sometime next year.

The money helped Porsche SE, the parent holding company, to reduce its huge debt from more than €11 billion at the end of the 2008/2009 fiscal year to €6.1 billion as of the end of January.

Porsche’s failed attempt to take over VW backfired, allowing the prey to become the hunter and resulting in a complex shareholding structure between the two groups.

Porsche SE, which currently owns Porsche AG plus 51 percent of VW’s ordinary shares, posted a six-month net profit of €871 million.

But for the full year, the parent group forecast a net loss of between one and five billion euros, owing in part to the deconsolidation of holdings in VW and another Porsche unit, a statement said.

Accounting methods would account for part of the loss as well, it added.

In addition, Porsche “is not participating in the capital increase planned by Volkswagen for the first half of 2010,” the statement said, which will dilute Porsche SE’s stake in VW and cut the former’s earnings further.

VW plans to raise up to €4 billion before buying the Porsche shares it does not already own and making the sports-car company its 10th brand.

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From lizards to water, eco-bumps snag Tesla’s giant Berlin car factory

In the green forest outside Berlin, a David and Goliath-style battle is playing out between electric carmaker Tesla and environmental campaigners who want to stop its planned "gigafactory".

From lizards to water, eco-bumps snag Tesla's giant Berlin car factory
Tesla's gigafactory outside the doors of Berlin. dpa-Zentralbild | Patrick Pleul

“When I saw on TV that the Tesla factory was going to be built here, I couldn’t believe it,” said Steffen Schorch, driving his trusty German-made car.

The 60-year-old from Erkner village in the Berlin commuter belt has become one of the faces of the fight against the US auto giant’s first European factory, due to open in the Brandenburg region near Berlin in July.

“Tesla needs far too much water, and the region does not have this water,” said the environmental activist, a local representative of the Nabu ecologist campaign group.

Announced in November 2019, Tesla’s gigafactory project was warmly welcomed as an endorsement of the “Made in Germany” quality mark – but was immediately met with opposition from local residents.

Demonstrations, legal action, open letters – residents have done everything in their power to delay the project, supported by powerful
environmental campaign groups Nabu and Gruene Liga.

Tesla was forced to temporarily suspend forest clearing last year after campaigners won an injunction over threats to the habitats of resident lizards and snakes during their winter slumber.

READ MORE: Is Germany’s Volkswagen becoming ‘the new Tesla’ as it ramps up e-vehicle production?

And now they have focused their attention on water consumption – which could reach up to 3.6 million cubic metres a year, or around 30 percent of the region’s available supply, according to the ZDF public broadcaster.

The extra demand could place a huge burden on a region already affected by water shortages and hit by summer droughts for the past three years.

Local residents and environmentalists are also concerned about the impact on the wetlands, an important source of biodiversity in the region.

Tesla Street

“The water situation is bad, and will get worse,” Heiko Baschin, a spokesman for the neighbourhood association IG Freienbrink, told AFP.

Brandenburg’s environment minister Axel Vogel sought to play down the issue, saying in March that “capacity has not been exceeded for now”.

But the authorities admit that “the impact of droughts is significant” and have set up a working group to examine the issue in the long term.

The gigafactory is set to sprawl over 300 hectares – equivalent to approximately 560 football fields – southwest of the German capital.

Tesla is aiming to produce 500,000 electric vehicles a year at the plant, which will also be home to “the largest battery factory in the world”,
according to group boss Elon Musk.

In a little over a year and a half, swathes of coniferous forest have already been cleared to make way for vast concrete rectangles on a red earth base, accessed via the already iconic Tesla Strasse (Tesla Street).

German bureaucracy

The new site still has only provisional construction permits, but Tesla has been authorised by local officials to begin work at its own risk.

Final approval depends on an assessment of the project’s environmental impact – including the issue of water.

In theory, if approval is not granted, Tesla will have to dismantle the entire complex at its own expense.

But “pressure is being exerted (on the regulatory authorities), linked to Tesla’s significant investment”, Gruene Liga’s Michael Greschow told AFP.

In early April, Tesla said it was “irritated” by the slow pace of German bureaucracy, calling for exceptions to the rules for projects that help the environment.

Economy Minister Peter Altmaier agreed in April that his government “had not done enough” to reduce bureaucracy, lauding the gigafactory as a “very important project”.

Despite Germany’s reputation for efficiency, major infrastructure projects are often held up by bureaucracy criticised as excessive by the business community.

Among the most embarrassing examples are Berlin’s new airport which opened last October after an eight-year delay and Stuttgart’s new train station, which has been under construction since 2010.

Brandenburg’s economy minister, Joerg Steinbach, raised the possibility in February that the Tesla factory could be delayed beyond its July planned opening for the same reason.

SEE ALSO: Tesla advertises over 300 jobs for new Gigafactory near Berlin