(Reuters) -Porsche AG cut its sales and profit outlook on Tuesday due to an unexpected aluminium alloy supply shortage, sending shares in the German luxury sports car maker to the bottom of Frankfurt’s blue-chip index.
Flooding at an unnamed European contractor has hurt supply of aluminium alloy, Porsche AG said, affecting production of all its models and possibly leading to shutdowns for one or more vehicle series.
The supplier has declared force majeure in writing, Porsche said in a statement, which means it is unable to meet its contractual obligations due to events outside its control.
Body components made of aluminium are used in all vehicle series manufactured by Porsche, and reliance on the supplier has exposed Porsche to particular risk.
Bernstein analysts said the flooding occurred at a Swiss supplier, and would lead to the production loss of at least 10,000-17,400 vehicles in the second half of 2024, the latest in a string of challenges for Porsche.
“Whether self-inflicted or genuinely outside its control, these have significantly tarnished what had been an extremely successful IPO in September 2022,” Bernstein analysts said.
“Porsche will certainly be closely questioned over its cluster risk management that has left it so vulnerable to one critical supplier.”
Porsche SE, the holding firm of the Porsche and Piech families that control Volkswagen (ETR:) and holds a blocking minority in Porsche AG, confirmed its 2024 earnings forecast despite the alloy supplier’s warning.
Shares in Porsche AG fell more than 4% while Volkswagen, which owns most of Porsche AG, were down 1%.
Aluminium maker Constellium (NYSE:), which is U.S.-listed but headquartered in France, earlier this month warned that facilities in Switzerland had been impacted by flooding. U.S.-based Novelis was also reported to have shut down a Swiss site due to floods.
Both companies, which name Porsche among their customers, either declined comment or were not immediately available for a response.
Porsche, which is scheduled to report first-half results on Wednesday, declined to name the alloy supplier.
Porsche AG now expects sales between 39 billion and 40 billion euros ($44 billion) as a result of the flooding in the aluminium supplier’s production facility. It previously expected revenue between 40 billion and 42 billion euros.
The company said it was to be expected that the delays in the production and delivery of vehicles would not be fully compensated for in the rest of the year.
Porsche now sees a return on sales between 14% and 15% for the year, down from its previous expectation of 15% to 17%.
The company faces muted demand in China, driving global deliveries down 7% in the first half of the year.
Porsche is also struggling with low electric vehicle sales this year. It watered down its EV ambitions on Monday, citing customer demand and developments in the sector.
($1 = 0.9183 euros)
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