SAIC Motor H1 net profit down 28 pct
August 30, 2008
SAIC Motor Corp Ltd said first half net profit fell 27.64 percent year-on-year to 1.97 billion yuan ($286.72 million) due to expenses incurred following its acquisition of Nanjing Automobile Group.
SAIC Motor, the listed unit of China's largest automaker Shanghai Automotive Industry Corp (SAIC), said it sold over 990,000 autos in the six-month period, up 17.6 percent year-on-year.
However, sales growth slowed markedly in the second quarter, and the company failed to meet its sales target for the first half.
Rising raw material costs also hurt its results, the company said.
Operating revenue was 57.64 billion yuan, up 12.87 percent year-on-year, supported by rising auto sales volume.
Domestic revenue rose 28.32 percent to 47.84 billion yuan, while overseas revenue fell 28.92 percent to 9.8 billion yuan.
Earnings per share were 0.30 yuan, down from 0.42 yuan a year earlier.
SAIC Motor said Chinese auto demand growth will ease in the rest of the year. It did not make a forecast for the full year.
In December 2007, SAIC Motor agreed to pay 2.1 billion yuan to Yuejing Motor to purchase the vehicle and core auto parts assets of Nanjing Auto.
In its statement, SAIC Motor said the consolidation of Nanjing Auto was having a short-term negative impact on operating profit.
It added that South Korea's Ssangyong Motor Co, which SAIC Motor controls with a 48.92 percent stake, has also seen a sharp decrease in domestic sales due to higher diesel prices and stricter emission standards.