Volkswagen AG (VOW): Porsche Expected To Hit Profitability Growth Again Next Year
Volkswagen AG (ETR:VOW) said that Porsche is planning to hit profit growth again next year once the Macan compact SUV and 918 Spyder hybrid hits the market. Porsche is targeting an increase in earnings before interest and taxes next year after a jump in spending on new vehicles prevents operating profits from rising in 2013 said Porsche chief financial officer Lutz Meschke.
“Expenses for the capacity expansion and the new model lines will be significantly higher in the second half of the year than in the first half,” stated Meschke. He said that increasing profit in 2014 “is the goal.”
Last year in August, Volkswagen acquired full control of Porsche’s automotive operations. The earnings from Porsche, Audi, and Bentley helped circumvent the major losses that they saw in Europe. Due to major unemployment rates, demand for new cars are at a two-decade low.
The investments by Porsche this year will surpass 1.3 billion euros ($1.76 billion). It will total more than 1 billion euros annually as of 2014. Projects will be funded from operating cash flow.