Porsche Automobile Holding SE significantly slashed its dividend after posting a massive pretax loss of 4.4 billion euro ($6.60 billion USD), The report confirms a profit warning Porsche issued just days before its 2008/2009 fiscal year ended on July 31.
Porsche SE said that the main factor for the loss was a write-down on cash settlement options to Volkswagen shares. Last year, Porsche cash-settled Volkswagen stock options giving it windfall gains of 8.57 billion euros.
Porsche said that the results were also influenced by the “hidden reserves and liabilities” identified in the course of the purchase price allocation for the shareholding in Volkswagen.
Volkswagen is set to take 49.9 percent in Porsche in the first step towards a full merger by 2011. The company is expected to pay approximately EUR 3.9 billion ($5.82 billion USD) for Porsche.
– By: Stephen Calogera