BERLIN (Reuters) -Volkswagen anchor investor Porsche SE on Thursday said it aimed to reduce its net debt by up to 16% by the end of 2023 compared to the previous year following its purchase of a Porsche AG equity stake last year.
The company said it aimed to reduce its net debt to between 6.1 billion euros and 5.6 billion euros by year-end. Net debt stood at 6.7 billion euros ($7.3 billion) at the end of 2022.
Porsche SE chair Hans Dieter Poetsch said the company had “a solid financing and repayment plan in place” backed by profits from the group, as well as dividend inflows from Volkswagen and Porsche.
The company proposed a dividend of 2.56 euros per preference share and 2.554 euros per ordinary share.
The latter belong exclusively to the Volkswagen owner families Porsche and Piech, which means they will receive around 391 million euros in dividend payments for 2022 out of a total of 783 million euros.
“It is important to us that this proposed dividend finds a balance between a stable dividend and the steady reduction of our debt,” Poetsch said.
The holding company of VW’s owner families raised debt capital of 7.1 billion euros in order to buy 25% of ordinary shares plus one share to float Porsche on the stock exchange last year.
Thanks to a profit increase at VW, Porsche SE’s group result climbed by 200 million euros to 4.8 billion euros last year. For 2023, Porsche SE expects group profit after tax of between 4.5 billion euros and 6.5 billion euros.
Poetsch said that Porsche SE’s share price was too low, saying that the company was “significantly undervalued”.
($1 = 0.9170 euros)
(Reporting by Ilona Wissenbach, Writing by Friederike Heine, Editing by Kirsti Knolle and Christina Fincher)