Porsche Is Keeping Its Dividend Despite Rising Expenses

Porsche intends to maintain its dividend at last year’s level, despite increased costs related to enhancing profitability. The German automaker announced that pending final approval from the supervisory board, it will suggest keeping the dividend roughly at the same amount during the annual meeting.

For 2023, Porsche distributed €2.31 ($2.40) per preferred share. The Stuttgart-based company is addressing current challenges with a suite of initiatives. This year, Porsche is significantly investing in the development of new vehicles featuring either internal combustion engines or plug-in hybrid technology, while also expanding its range of exclusive and special equipment.

The firm anticipates that these planned initiatives will affect cash flow in its automotive division—excluding financial services—by up to 800 million euros by 2025. Porsche projects sales revenue will be between 39 and 40 billion euros in 2025, with an operating return on sales between 10% and 12%. In 2024, the return was at the lower end of the projected range of 14% to 15%.

Investors have had little reason to cheer lately, as Porsche’s share price has struggled since its record-breaking rise following its initial public offering in September 2022.

The shares peaked at around €120 in May 2023 but have since lost significant value. Currently, the share price is about half of its peak value and is about 25% below the initial issue price of €82.50.

• Also See: Porsche Foresees A Challenging Year 2025