German sports car maker Porsche has seen operating profit rebound sharply in January to September this year as it reduces reliance on the China market. The improvement is hard to interpret as a sales recovery because a base effect from last year’s large restructuring costs was significant.

CNBC reported on Oct. 27 that Porsche’s operating profit for January to September was 1.74 billion euros, up more than 430 percent from 40 million euros a year earlier. The operating margin rose to 6.9 percent from 0.2 percent.

The drop in strategic restructuring costs was a key factor. Those costs fell to about 500 million euros this year from 2.7 billion euros in the same period last year. A sales mix centered on high-margin models and pricing policy also supported results.

Revenue fell 5.9 percent to 25.28 billion euros, while global vehicle deliveries slid 16 percent to 178,532. China deliveries plunged 33 percent to 21,493. Intensifying competition with local makers such as BYD, Geely and Xiaomi weighed on performance.

China’s share of sales fell to 12 percent from about 15.1 percent in the same period last year. North America remained Porsche’s largest market, with 56,088 vehicles delivered. Deliveries of the core 911 sports car rose 12 percent to 42,217, contrasting with the overall decline in sales.

Porsche Chief Financial Officer Jochen Breckner (요헨 브렉너) said a regionally balanced sales structure is improving the company’s ability to respond to market volatility. He said cutting reliance on China reduced the impact of local market changes.

Net cash flow in the automotive business rose to 2.5 billion euros, but it reflected a significant one-off cash inflow from the sale of a stake related to Bugatti Rimac. It is difficult to say that cash generation from the core business improved by the same magnitude.

Porsche is pursuing a “value over volume” strategy that prioritises profitability and is cutting costs and headcount in parallel. U.S. tariffs and weak demand in China remain a burden.

Citi forecast 2027 could be a low point for performance, but operating profit and net cash flow would recover from 2028 and net cash flow would exceed the level at the time of the initial public offering in 2031. Porsche maintained its outlook for revenue of 35 to 36 billion euros this year and an operating margin of 5.5 to 7.5 percent.