Porsche – First Virtual Annual Meeting Declares Risky €676 Million in Dividends. No Earnings Forecast Yet

Because of the  ban on meetings in connection with the COVID-19 pandemic, Porsche Automobil Holding SE (Porsche SE), Stuttgart, held a virtual Annual General meeting. “With the health of all those attending in mind, we have decided this year to hold our Annual General Meeting virtually for the first time in the history of our company,” said the Chairman of the board of management Hans Dieter Pötsch.

The shareholders approved the proposed distribution of a dividend of €2.210 per preference share and €2.204 per ordinary share for the fiscal year 2019. The total distribution comes to around €676 million euro. It’s a risky move given the ongoing Covid pandemic that has infected global economies – one that could prompt a liquidity crisis.

For fiscal year 2019, the group result after tax reached €4.4 billion– an increase of around 26% compared to the fiscal year 2018. The increase is mostly attributable to the increase in the result from the investment accounted for at equity in Volkswagen AG.

As of the 31 December 2019 reporting date, net liquidity stood at 553 million euro (prior year: 864 million euro). The decrease comes from the acquisition of Volkswagen ordinary shares. The dividend proposal adjusted in July 2020 reflects a strong fiscal year 2019 but also the developments driven by the COVID-19 pandemic in the current fiscal year 2020.

According to Pötsch, the business figures for the first six months of the current fiscal year have been heavily influenced by the COVID-19 pandemic. The group result after tax of Porsche SE came to, gulp, -€329 million euro in the first half of 2020, compared to +€2.38 billion euro in the prior-year period.

“The uncertainty surrounding the business development at the level of the Volkswagen Group has restricted the ability to forecast at the level of the Porsche SE Group. It is not currently possible to make a reliable and realistic forecast for the fiscal year 2020,” Porsche said.

However, the Porsche SE Group expects a positive group result after tax for the fiscal year 2020. The forecast on the group net liquidity remains unchanged. Without taking additional investments into account, it lies between €0.4 billion to €0.9 billion as of 31 December 2020.