Top investor Porsche pressures Volkswagen after drop in first-quarter profit
Porsche SE Urges Volkswagen to Overhaul Business Model Amid Profit Decline
Porsche SE's First-Quarter Financial Results
May 13 (Reuters) - Porsche SE, the investment firm that controls Volkswagen, urged the German carmaker to fundamentally overhaul its business model on Wednesday as VW's struggles dragged down its first-quarter adjusted profit.
The Stuttgart-based holding company posted adjusted profit after tax of 382 million euros ($469.36 million) for the January-March period, a 21% drop compared with last year's period.
Impact of Volkswagen's Performance
Volkswagen's business model "needs to be fundamentally realigned to match the new market conditions," Hans Dieter Poetsch, chairman of Porsche SE's management board, said in a statement.
The call for change comes as VW battles declining margins and undergoes major restructuring.
Group Result and Non-Cash Writedown
Porsche SE's group result after tax was a loss of 923 million euros, weighed by a 1.3 billion euro non-cash writedown on its Volkswagen stake.
Porsche SE's Stake and Influence in Volkswagen
The holding company of Germany's Porsche-Piech auto dynasty is Volkswagen's largest investor with 31.9% of shares and 53.3% of voting rights. It also owns 12.5% of sports-car maker Porsche AG.
Commitment to Volkswagen and Push for Savings
Poetsch has previously voiced Porsche SE's commitment to Volkswagen as an anchor investor but pushed the group and its subsidiaries to find savings.
Volkswagen's Response and Cost-Cutting Measures
Volkswagen CEO Oliver Blume has vowed to ramp up cost-cutting further on top of 50,000 job cuts under way across the group, with under-used plants in Germany under the spotlight despite a 2024 deal with unions guaranteeing no plant closures this decade.
Additional Information
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(Reporting by Simon Ferdinand Eibach in Gdansk, Rachel More in Berlin, editing by Kirsti Knolle and Linda Pasquini)
