Porsche earned more profits than revenues in the first half of its financial year thanks to controversial dealings in Volkswagen options that left many hedge funds nursing heavy losses.

The luxury sports car-maker reported this morning that it enjoyed a €6.8bn (£6.3bn) windfall from its share options in VW, whose value soared last autumn after it emerged that Porsche controlled most of the company.

But Porsche also gave its first signal that the global recession has caught up with it by warning that sales would drop this year, as high-rolling consumers opt for less conspicuous products. First-half sales revenues were down 13% to €3bn as pre-tax profits quadrupled to €7.3bn.

Under Wendelin Wiedeking and Holger Haerter, its abrasive chief executive and chief financial officer respectively, Porsche angered market players late last year by its obscure dealings in VW options which, briefly, made VW the world's largest company by market capitalisation as the stock rose five times in value to more than €1,000 per share.

Hedge funds had short-sold VW, on the belief that the company was overvalued. But panic buying broke out on 28 October last year when the market realised that Porsche actually owned or held options on most of VW's shares, leaving the 'shorters' chasing the remaining few shares to close their positions.

The German authorities, including chief regulator BaFin, mounted an inquiry into alleged short-selling and market manipulation which ended inconclusively. Investors remain wary of Porsche which is now seeking a credit rating for the first time to restore confidence and has always protested its innocence.

Porsche already owns 51% of VW, the world's third-largest auto group, and has just secured an extension to a €10bn credit line to help fund its purchase of more VW stock to boost its stake to 75% - enough to give it full control of a normal German company. But the federal state of Lower Saxony continues to hold on to a blocking 20% vote.