Billion Euro Loss Due to Depreciations: Porsche Takes a Hit
Depreciation and Amortization Expenses of Porsche SE Explored
Hey there! Let's dive into the latest financial woes of Porsche Automobil Holding SE, the major shareholder of Volkswagen and Porsche. They're based in Stuttgart, and they've just reported a massive loss of over a billion Euros.
In the first quarter of this year, the company has reported a whopping loss of 1.1 billion Euros, which is quite a switch from the profit of 1.1 billion Euros they saw last year. What's the reason behind this rollercoaster? Renewed depreciations on their two core investments, that's what! They've recorded impairments of 1.4 billion Euros on their stake in Volkswagen AG and 168 million Euros on their investment in Porsche AG.
Now, let's break it down a bit: Impairments refer to a decline in the estimated value of assets, and these losses have significantly impacted the group’s result after tax for the period. To put it in perspective, if we exclude these impairment losses and related deferred taxes, the adjusted result after tax was a positive 484 million Euros for Q1 2025. Sadly, that's still down from 1.058 billion Euros in the previous year’s first quarter.
The reasons behind these impairments? Well, it seems like both Volkswagen AG and Porsche AG are feeling the heat from challenging market conditions. This includes a drop in sales, reduced operating profit margins, and revised revenue forecasts. Porsche AG itself faced a decrease in sales and profitability in Q1 2025, with sales sliding 1.7% year-over-year and operating income plummeting by 40.6%.
Long story short, Porsche Automobil Holding SE took a billion-euro hit due to large-scale non-cash impairments on its investments in Volkswagen AG (1.403 billion Euros) and Porsche AG (168 million Euros). These losses overshadowed the operational earnings of the group for the period.
Stay tuned for more updates on this developing story!
P.S. Although we're unbiased, it's always a bummer to see such a big loss! Here's hoping things turn around for Porsche Automobil Holding SE soon! 🥺🤞🏼💪🏼🏎️
The impairments on Porsche Automobil Holding SE's investments, specifically in the automotive industry with Volkswagen AG and the finance sector with Porsche AG, significantly contributed to its billion-euro loss in Q1 of this year. Challenging market conditions, including reduced sales and profit margins, in the transportation and automotive sectors have been major factors impacting both Volkswagen AG and Porsche AG.
