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Porsche warns of declining profitability, but increases dividend after strong 2023 performance

Porsche Mission X on display at the IAA Mobility Show 2023 in Munich, Germany.

Arjun Karpal | CNBC

Porsche warned on Tuesday that profitability would be lower this year as it launches new models in difficult economic conditions, but raised its dividend on the back of higher operating profits in 2023.

The German luxury carmaker said it expects its operating margin to be between 15% and 17% in 2024, down from the 18% recorded in 2023 and 2022. In the long term, the Group aims to exceed its operating profit margin. 20%.

Explaining a more cautious earnings outlook, the company quoted “A comprehensive renewal of our product range in 2024, the global framework situation, increased depreciation of capitalized development costs and continued investment in the brand and the Porsche ecosystem.”

The company’s stock rose about 4.8% by early afternoon, reversing an early loss of more than 2%.

Porsche is launching four new car series in 2024 in the form of the Panamera, Macan, Taycan and 911 model lines.

“2024 will be a year of product launches for Porsche more than any other year in our company’s history,” Chairman Oliver Blume said in a statement.

“We will be bringing a range of exhilarating sports cars to the road, delighting customers around the world, and this will continue to drive us forward for years to come.”

Porsche’s 2023 revenue rose 7.7% to 40.53 billion euros ($44.29 billion), and operating profit rose 7.6% to 7.28 billion euros, the company said.

As a result, the company proposed a dividend of 2.30 euros per common share, more than double the 1 euro per share it had offered for 2022.

“Porsche has proven in 2023 that we are resilient, profitable and financially strong even in uncertain times,” Chief Financial Officer Lutz Meschke said in a statement. is benefiting from a more balanced sales structure than in the past.”

“Building on this, we are laying the foundations in 2024 for a jump start in 2025. We remain focused on the sustainable success of our company, our customers and employees, The company and its shareholders all benefit.”

Sales for the full year 2024 are expected to be between 40 billion euros and 42 billion euros.

Meschke told CNBC on Tuesday that Porsche still expects a “very difficult situation” in China, but the company is making significant investments in its customer base despite China’s economic headwinds. said.

“We’re going to see significant growth when it comes to China’s wealthy population, so we need to invest not only in the product itself, but in the entire ecosystem and the brand itself, and we plan to do that in 2024 as well as in 2025.” He spoke to CNBC’s Annette Weisbach at the automaker’s facility in Leipzig, Germany.

“With the introduction of the four new models, we will have the full range by 2025. We expect a strong recovery for Porsche in China.”

Porsche’s parent company Volkswagen,caveat Sales growth was expected to slow last week. This is due to worsening economic conditions, increased competition and rising costs.

Summarize this content to 100 words Porsche Mission X on display at the IAA Mobility Show 2023 in Munich, Germany.Arjun Karpal | CNBCPorsche warned on Tuesday that profitability would be lower this year as it launches new models in difficult economic conditions, but raised its dividend on the back of higher operating profits in 2023.The German luxury carmaker said it expects its operating margin to be between 15% and 17% in 2024, down from the 18% recorded in 2023 and 2022. In the long term, the Group aims to exceed its operating profit margin. 20%.Explaining a more cautious earnings outlook, the company quoted “A comprehensive renewal of our product range in 2024, the global framework situation, increased depreciation of capitalized development costs and continued investment in the brand and the Porsche ecosystem.”The company’s stock rose about 4.8% by early afternoon, reversing an early loss of more than 2%.Porsche is launching four new car series in 2024 in the form of the Panamera, Macan, Taycan and 911 model lines.”2024 will be a year of product launches for Porsche more than any other year in our company’s history,” Chairman Oliver Blume said in a statement.“We will be bringing a range of exhilarating sports cars to the road, delighting customers around the world, and this will continue to drive us forward for years to come.”Porsche’s 2023 revenue rose 7.7% to 40.53 billion euros ($44.29 billion), and operating profit rose 7.6% to 7.28 billion euros, the company said.As a result, the company proposed a dividend of 2.30 euros per common share, more than double the 1 euro per share it had offered for 2022.”Porsche has proven in 2023 that we are resilient, profitable and financially strong even in uncertain times,” Chief Financial Officer Lutz Meschke said in a statement. is benefiting from a more balanced sales structure than in the past.”“Building on this, we are laying the foundations in 2024 for a jump start in 2025. We remain focused on the sustainable success of our company, our customers and employees, The company and its shareholders all benefit.”Sales for the full year 2024 are expected to be between 40 billion euros and 42 billion euros.Meschke told CNBC on Tuesday that Porsche still expects a “very difficult situation” in China, but the company is making significant investments in its customer base despite China’s economic headwinds. said.”We’re going to see significant growth when it comes to China’s wealthy population, so we need to invest not only in the product itself, but in the entire ecosystem and the brand itself, and we plan to do that in 2024 as well as in 2025.” He spoke to CNBC’s Annette Weisbach at the automaker’s facility in Leipzig, Germany.“With the introduction of the four new models, we will have the full range by 2025. We expect a strong recovery for Porsche in China.”Porsche’s parent company Volkswagen,caveat Sales growth was expected to slow last week. This is due to worsening economic conditions, increased competition and rising costs.
https://www.cnbc.com/2024/03/12/porsche-warns-of-fall-in-profitability-but-hikes-dividend-on-strong-2023-results.html Porsche warns of declining profitability, but increases dividend after strong 2023 performance

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