Porsche has warned that flooding at an aluminium supplier is causing delays in production of several models and will drag the German sports car maker’s profit margins and revenues below forecasts this year.
The profit warning is the latest setback for the Stuttgart-based company, which was already grappling with a declining operating margin, falling sales in China and a 40 per cent drop in its share price over the past year.
Shares in Porsche fell 3 per cent by late morning in Frankfurt on Tuesday after it said “the flooding of a production facility of an important European aluminium supplier” had caused “a significant supply shortage with regard to special aluminium alloys” that are used in “all vehicle series”.
“Despite immediate countermeasures, it is becoming apparent that the impending supply shortage will lead to impairments in production,” it added.
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Heavy rain in southern Germany caused severe flooding last month that led to several areas declaring a state of emergency in Bavaria and Baden-Württemberg, where much of the country’s car industry is based.
Porsche said its operating profit margin was expected to be 14 to 15 per cent this year, down from its earlier forecast of 15 to 17 per cent. Its annual sales are expected to be €39-€40 billion, down from its previous projection of €40bn-€42bn, it said.
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The delays were “expected to last several weeks and may possibly lead to production shutdowns of one or more vehicle series”, it said, adding that “delays in the production and delivery of vehicles will not be fully compensated for in the further course of the financial year”.
The company’s operating profit margin already fell in the first quarter to 14.2 per cent, its lowest since the pandemic hit in 2020, while in the six months to June its sales in China were down a third from a year ago.
Porsche, which listed on the Frankfurt Stock Exchange two years ago but is still majority owned by Volkswagen Group, made the announcement a day before it was due to publish half-year results on Wednesday.
The sports car maker said the delays caused by flooding meant electric vehicles would only account for 12 to 13 per cent of total deliveries this year, down from its earlier forecast of 13 to 15 per cent.
It added that the net cash flow margin in its automotive division – excluding the financing operation – would be 7 to 8.5 per cent, down from an earlier forecast of 8.5 to 10.5 per cent.
The warning came two weeks after its parent VW lowered its operating profit margin forecast for this year and said its Audi division was considering closing a factory in Brussels, where it employs about 3,000 people, due to lower demand for electric cars. – Copyright The Financial Times Limited 2024
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