Volkswagen’s Top Owner Sees €20 Billion Loss in 2024

(Bloomberg) -- Porsche Automobil Holding SE expects an after-tax loss of about €20 billion ($21.7 billion) for fiscal 2024 due to deteriorations in its investment holdings, underscoring the deep strains afflicting some of Europe’s top carmakers.

The holding company, the biggest shareholder in Volkswagen AG, revealed a non-cash impairment of negative €19.9 billion on the carrying value of its investment in VW, close to the maximum of a previously released impairment range estimate. The impairment of the carrying amount of Porsche SE’s investment in carmaker Porsche AG is negative €3.4 billion, also near the maximum end, according to a filing Friday.

The disclosure closes a messy chapter for the companies, after Porsche SE said in December that delays in corporate planning by VW would force the holding company to use analysts’ assumptions rather than internal assessments to conduct impairment testing. Volkswagen and Porsche are also contending with weak demand for electric vehicles in Europe, challenges in China and new tariffs imposed by US President Donald Trump.

Porsche SE on Friday said net debt is expected to be about €5.2 billion as of Dec. 31, 2024. 

Under German commercial law, however, the impairment of the Porsche AG investment will be somewhat smaller, or negative €2.9 billion. That will likely result in an annual loss of €1.5 billion, the company said. The impairments will not have an effect on the company’s cash.

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