FRANKFURT German financial holding company Porsche SE (PSHG_p.DE) plans to use the bulk of its 2.59 billion euros (2.07 billion pounds) in net cash for strategic acquisitions rather than return it to shareholders.
"Porsche SE intends to use the major portion of its current liquidity for strategic equity investments, focusing along the automotive value chain," the company said in its nine-month earnings statement on Tuesday.
Analyst Jasko Terzic at DZ Bank reaffirmed his "sell" recommendation in a research note following the results, writing: "We still did not get any indication of prospective usage of its high net liquidity."
Shares in Porsche SE traded up 1.4 percent as of 10.18 a.m British time, lagging slightly higher gains by Italian peer Exor (EXOR.MI), the holding vehicle of Fiat's FIA.MI Agnelli and Elkann families.
Ever since selling the rest of Porsche sports cars to Volkswagen (VOWG_p.DE) in August for 4.5 billion in cash, the Stuttgart-based holding company relies solely on dividend payments from VW and its own value now depends mainly on the market capitalisation of VW as well as its liquidity reserves.
Porsche SE nearly collapsed in 2009 under the weight of more than 10 billion euros in debt amassed during a risky attempt to seize control of much larger peer Volkswagen, in which it still holds a 32.2 percent of outstanding shares.
After agreeing to sack its management team led by then-Chief Executive Wendelin Wiedeking and Holger Haerter, his head of finance, the company was forced to sell its operating assets to VW and raise about 5 billion in a capital increase to plug gaping holes in its balance sheet.
In June, Porsche SE's voting shareholders -- predominantly the Porsche and Piech families with 10 percent held by the Gulf state of Qatar -- agreed to change its corporate statutes to allow the company to invest in a diverse range of businesses including renewable energy and real estate.
The move has largely disappointed investors stuck holding non-voting preferred shares in a company battling a host of lawsuits and priced by the market at a discount to its net asset value.
(Reporting By Christiaan Hetzner; Editing by Christoph Steitz)