Porsche warns of fall in profitability but hikes dividend on strong 2023 results

Porsche on Tuesday warned that profitability will decline this year as it launches new models amid tough economic conditions, but hiked its dividend on the back of a rise in 2023 operating profit.

The German luxury automaker said it expects an operating return on sales of between 15% and 17% in 2024, down from the 18% margin notched in 2023 and 2022. In the long term, the group targets an operating return on sales of more than 20%.

Explaining the more cautious profitability outlook, the company cited "the comprehensive renewal of its product range in 2024, the global framework conditions, higher depreciations on capitalized development costs and the continued investments in the brand and the Porsche ecosystem."

The company's shares were around 4.8% higher by early afternoon, having reversed opening losses of more than 2%.

Porsche is launching four new car ranges in 2024 in the form of the Panamera, Macan, Taycan and 911 model lines.

"2024 is going to be a year of product launches for Porsche – more so than any year in our history," Chairman Oliver Blume said in a statement.

"We will be introducing a variety of exhilarating sports cars to the road, they will delight our customers around the world. This will put the wind at our back for years to come."

Porsche's sales revenue rose 7.7% in 2023 to 40.53 billion euros ($44.29 billion), the company announced, while operating profit jumped 7.6% to 7.28 billion euros.

As a result, the company proposed a dividend of 2.30 euros per ordinary share, more than double the 1 euro per share offered in 2022.

"Porsche proved in 2023 that we are resilient, highly profitable and financially robust even in volatile times. And we benefit from an even better-balanced sales structure than in the past,"