Volkswagen controlling families demand overhaul after dent to profit
Porsche SE reports 21% drop in Q1 adjusted profit after tax; Volkswagen undergoing major restructuring
Berlin: Volkswagen's controlling family shareholders piled pressure on the automaker to overhaul its business model on Wednesday after the German company's ongoing problems led to a drop in first-quarter profit at their holding group.
Porsche SE, the holding company of the Porsche-Piech auto dynasty and Volkswagen's largest investor, posted a 21% drop in adjusted profit after tax of 382 million euros ($469 million) for the January-March period.
Porsche SE's unadjusted result after tax was a 923 million euro loss due to a 1.3 billion euro non-cash writedown on its Volkswagen stake, after a 1.1 billion euro loss last year.
Porsche SE is looking to defence and artificial intelligence investments as its core automotive holdings suffer from falling profits in a global market under fire from tariffs, Chinese competition and a troubled transition to electric vehicles.
Such investments are still a small part of the portfolio at Porsche SE, which said it generated proceeds of 60 million euros in the first quarter from the sale of its stake in semiconductor startup Celestial AI.
PUSH FOR 'REALIGNMENT'
Porsche SE's results were in line with expectations, its board chairman Hans Dieter Poetsch said in a statement.
"At the same time, the business models that have served our core investments well for a long time now need to be realigned," Poetsch added in reference to Volkswagen and its Porsche AG subsidiary.
Porsche SE owns 31.9% of Volkswagen shares and 53.3% of voting rights and 12.5% of sportscar maker Porsche AG.
Poetsch has previously voiced Porsche SE's commitment to Volkswagen, but pushed it to find savings. Volkswagen CEO Oliver Blume has vowed to ramp up cost-cutting further on top of 50,000 job cuts under way, with under-used plants in Germany under the spotlight despite a 2024 deal with unions guaranteeing no plant closures this decade.