By Victoria Waldersee
BERLIN (Reuters) -Porsche said on Wednesday it will keep its dividend for 2024 at the previous year’s level despite a 30.4% drop in net profit, according to Reuters calculations, as the luxury carmaker battles high costs and weak demand in China.
Citing a “persistently challenging environment”, the company also pared back its medium-term margin target to 15-17% from 17-19%.
Porsche’s shares suffered their worst day on the stock market last month when it warned its 2025 margin would hit just 10-12% because of an 800-million euro ($872 million) dent to profits as it pivoted back to more combustion engine and hybrid models.
The carmaker, which at its stock market debut in 2022 was valued higher than its parent company Volkswagen AG, has fallen from grace since, struggling in particular with low sales in China, its top market, where sales dropped 28% in 2024.
Like Volkswagen, which warned on Tuesday that margins would remain flat in 2025 as it battles to reduce costs, Porsche is also downsizing in an attempt to boost profitability towards its long-term target of 20%.
The luxury carmaker will cut 2,000 jobs, on top of the 1,900 already announced, and will enter negotiations with unions in the second half of the year over further cuts, it said.
Porsche’s operating profits fell 22.6% last year to 5.6 billion euros, yielding a return on sales of 14.1% despite revenue remaining roughly on the previous year’s level, as renewing five out of six of its model lines weighed on earnings.
With EV demand lagging, the carmaker promised to offer a range of combustion engine, hybrid or electric models “well into the 2030s” and was evaluating a new SUV model line with combustion and hybrid options, to be launched towards the end of the decade, it said.
($1 = 0.9172 euros)
(Reporting by Victoria Waldersee, Ilona Wissenbach; Editing by Rachel More and Lincoln Feast.)
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