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Old August 8th, 2001, 08:48 AM   #1
Magic Mtn Dan
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Porsche may not be racing but they're winning at the bank!

Porsche sees 2000/01 pretax profit over one billion Deutschmarks

FRANKFURT, Aug 8 (Reuters) - German sports car maker Porsche AG, said on Wednesday it would post a record profit of over one billion marks in its business year ending July 31 and that it sold over 50,000 vehicles in the period.

The world's most profitable carmaker, which will be removed from the mid-cap MDAX index in September, posted a 1999/2000 pretax profit of 848.5 million marks and sold 48,797 vehicles.

"We will, taking into account everything that we know already, show a pre-tax result in the business year 2000/2001 that exceeds one billion marks," management board chief Wendelin Wiedeking said in a statement.

At 0720 GMT, Porsche shares were up 1.25 percent at 405 euros, outperforming the Dow Jones European Auto Stoxx Index which was up 0.09 percent.

"The statement from Mr Wiedeking this morning was very positive and superseded the confirmation that it would be removed from the DAX which has been expected for a long time," said Lars Ziehn, an analyst at Deutsche Bank. He rates the stock a "buy" and has a target price of 500 euros.

He said the pretax profit guidance was well over Deutsche's estimates although the unit sales figure was no surprise.

Porsche also said it saw no danger to its stock price from the decision by German stock operator Deutsche Boerse to remove it from the mid-cap MDAX index after the auto maker failed to meet bourse regulations to report on a quarterly basis.

Most fund managers and analysts say that the exclusion will make little difference to Porsche's shares which have outperformed the Dow Jones Auto Stoxx Index since the start of the year.

The carmaker argues quarterly reporting promotes a short-termist mentality that can be detrimental to long-term strategy.

"In our opinion, quarterly reporting is mainly a way of making business for Deutsche Boerse and banks," said Porsche.

"We are interested in long-term shareholder investments and less in the constant up and down of the price," it added.

Porsche also argued that its inclusion in the Morgan Stanley Capital International Index later in the year will compensate for any negative impact from MDAX exclusion.

"For investors, the forthcoming inclusion of the Porsche share in the Morgan Stanley Capital International Index, the most important global index, is far more important than remaining in the internationally insignificant MDAX," said the company.
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