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Porsche Power Shift as Qatar Sheikh Joins Board and Hans-Peter Porsche Retires!

Six-month figures show improvement at the loss making firm.

by on Jan.29, 2010

Keep on truckin' with new Arab leadership and a sedan and SUV as the best sellers.

Porsche Automobil Holding SE’s annual meeting saw economic reality prevail over history, as board member Hans-Peter Porsche 69, retired from office and was immediately replaced by “His Excellency” Sheikh Jassim Bin Abdulaziz Bin Jassim Al-Thani, 31, as a representative of Qatar Holding LLC, Doha, on the supervisory board of the company.

The changes came at the general meeting held on Friday in the Porsche-Arena in Stuttgart. Qatar’s sovereign wealth fund acquired a 10% voting stake in Porsche last year amid the turmoil of a reckless, leveraged and failed takeover bid of Volkswagen by Porsche that ultimately saw the ouster of Porsche chief executive Wendelin Wiedeking and chief financial officer Holger Haerter.

Sheikh Jassim Bin Abdulaziz Bin Jassim Al-Thani is the chairman of the board of Qatar Foundation International, USA, and is a member of the boards of Qatar National Bank, of InvestCorp and of Qatar Foundation Endowment Fund.

It appears that the Porsche and Piech families still control 90% of the remaining voting rights.


Other shareholder representatives on the supervisory board of Porsche SE are the chairman, Dr. Wolfgang Porsche, and Dr. Ferdinand Oliver Porsche, Dr. Ferdinand K. Piëch, Dr. Hans Michel Piëch and Prof. Dr. Ulrich Lehner.

In November of 2009, Porsche SE reported it lost (-€4.4) billion before taxes for the business year 2008/09, or operations for August 1, 2008 to July 31, 2009. Net loss was (-€2.52) billion for the 12 months. The loss was Porsche’s first annual deficit since 1994.

In December 2009, VW took 49.9% ownership in Porsche AG at a price of €3.9 billion. It will buy the balance in 2011. VW expects that Porsche will eventually add €700 million in profits annually to its business.

It is ironic that the profitable VW is also financing the Porsche takeover by issuing debt and watering its stock. At the end of last year, VW shareholders authorized the sale of up to 135 million non-voting preferred shares during the next five years. Additional shares could be offered in the first half of next year, the company said.

During the annual meeting this morning, the CEO, Prof. Dr. Martin Winterkorn, said that Porsche saw sales drop during the first six months of 2009/10 by 3%. Sales of Porsche AG had fallen by 25% in the first four months of the half-year when compared to the same period of the prior year.

Porsche now says that the decline should be just (-3.1) % for the full six months, based on preliminary figures. Sales are expected to account for about 33,200 units; revenues will show a decrease of -3.3% to €2.9 billion.

The flagship 911 model continues to be shunned by potential buyers, declining 45% at 7,400 units.

Cayenne remains the best selling model at about 13,100 units sold, off 22%. Boxster and related Cayman models are increased 14% to 4,500 units.

The new Panamera sedan, only on sale since September 2009, garnered 8,200 customers in the first six months, based on preliminary figures. The rollout global rollout is continuing, and if the trend continues, the sedan could overtake the SUV as the best seller.

Nevertheless, the fabled carmaker is now the purveyor of more sedans and sport utility vehicles than sports cars.

North America remains problematic for the maker. Unit sales of Porsche dropped by 16% in the region to 11,000 vehicles; the drop in Europe is 6% to 10,200 units. In the rest of the world, sales of Porsche continue to grow. According to the preliminary reports, unit sales in the first six months of the current fiscal year come to 12,000 vehicles, reflecting growth of +18%.

Manufacturing output on the basis of the preliminary figures for the period should reach 40,877 units, almost reaching the same level as the prior year, off 1.9%.

On the basis of the performance in the second quarter, Porsche continues to say that unit sales for the full fiscal year 2009/10 will exceed the prior-year figure of 75,238 vehicles.

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