Porsche CEO Sees Stable Operating Profit in the Next Few Years

By Ilka Kopplin 

DETROIT-- Porsche AG chief executive Oliver Blume said he expects operating profit in the next few years to remain stable at around the level of the past two years, given high investments, speaking in an interview on the sidelines of the North American International Auto Show in Detroit.

In December, Porsche's supervisory board approved EUR1 billion in outlays for the sports car maker's electric car project. That followed approval over the summer of a EUR1 billion package to modernize production sites. Mr. Blume said he couldn't rule out a decline in operating profit as a result, a reversal for the brand that contributed a big chunk of parent Volkswagen AG's profit in the past.

The brand's financial results could show some consolidation, Mr. Blume cautioned, but noted that depending on market and currency developments, operating profit could be slightly higher or lower than the average level attained over the past two years.

In 2014, Porsche AG's operating profit was up 5.4% from a year earlier, and jumped around 30% in the first nine months of 2015 to EUR2.55 billion.

Porsche ended the year on a positive note, he said. In the fall, the company forecast considerably higher sales and operating profit for the full year, compared with 2014. Deliveries, a proxy for sales, were up about 19% in 2015, to 225,000 cars.

For 2016, Mr. Blume expects sales growth in deliveries in at least a single-digit-percentage range.

Mr. Blume said he didn't expect parent Volkswagen AG's emissions scandal to harm the brand's image. Last year, Volkswagen admitted to installing software in 11 million diesel models world-wide, allowing the vehicles to cheat emission tests.

The engines of affected 3-liter diesel models at Porsche were from Audi, he noted, but Porsche would contribute to resolving the matter, and said it would continue to produce diesel models.

U.S. authorities are expected to make a decision regarding 3-liter diesel engine remedy proposals in January, he said.

Mr. Blume took the helm at Porsche AG from Matthias Mueller, who was appointed chief executive of the Volkswagen group after the scandal broke in September of last year.

Write to Ilka Kopplin at [e-mail]

(END) Dow Jones Newswires

January 13, 2016 13:15 ET (18:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.