Geely to top 1 year sales target as H1 profits rise 145%

Updated: 2009-09-09 07:28

By George Ng(HK Edition)

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Geely to top 1 year sales target as H1 profits rise 145%

HONG KONG: Mainland automaker Geely Automobile Holdings Ltd said it is confident that it will beat its full-year sales target after reporting a 145 percent growth in net profit for the first half.

"We are confident that the whole-year sales volume will be higher than our target as export sales improve in the second half and domestic sales remain robust," Chief Executive Officer Gui Sheng-yue told a press briefing for the interim results yesterday.

The automaker earlier set a full-year sales target of 250,000 units, representing a 22 percent growth over 2008.

Geely posted a net profit of 596 million yuan for the six months ended June, up sharply from 243 million yuan a year ago, as the company fully consolidated the financial results of the group's auto making units for the period after it acquired an additional 44.19 percent stake in those units.

The company, which focuses on the small-sized car market, previously owned 46.81 percent of those units before it completed the acquisition on July 01, 2008.

As a result of the consolidation of operating results, total revenue jumped nearly 88 times to 5.95 billion yuan from only 67.1 million yuan a year ago.

Assuming the acquisition had been completed on January 1, 2008, Geely's total revenue for the six months ended June 2008 would have been approximately 4.41 billion yuan, while profit for the same period would have been 541 million yuan.

On a pro forma basis, the year-on-year growth in total revenue and net profit for the first half this year should be 35 percent and 10 percent respectively.

The pro forma growth in revenue was attributable to increased car sales, helped by strong demand for small-sized sedans in the domestic market after the central government implemented a stimulus package earlier this year that encouraged consumers to buy small cars, the automaker said.

The company sold a total of 137,758 units of vehicles during the period, up 29 percent from a year ago, achieving 55 percent of its full-year sales target of 250,000 units.

However, export sales dropped nearly 70 percent from a year ago to 6,297 units due to the global economic downturn, the company said.

Executive Director Ang Siu-lun told the same briefing that export sales have been improving, with sales volume climbing from several hundred units per month earlier to nearly 1000 units a month recently as global economic conditions improved.

Meanwhile, CEO Gui Sheng-yue said the company did not participate in the bidding for Volvo, contrary to media reports.

He declined to comment whether the company's parent is bidding for Volvo.

The company decided not to pay any interim dividend as it did a year ago.

(HK Edition 09/09/2009 page4)