United Motors Group records Rs. 2 b profit after tax

Wednesday, 12 June 2013 00:51 - - {{hitsCtrl.values.hits}}

The net profit of United Motors reached its highest-ever level in history to record Rs. 1.89 billion, an increase of 41% in comparison to last year. While the year under review was very challenging for the automobile industry, the UML Group was able to record a profit after tax of Rs. 2 billion, a drop of 13% from the previous year.

Commenting on the financial performance, UML Chief Executive Officer Chanaka Yatawara noted: “UML’s success is due to a number of factors. One of our main strengths is our continuous cost management framework in all our operations.”

In addition, he pointed to the Group’s success in the market for vehicle permit-holders, stating: “We are able to give our customers the best value for money products. We are offering the diesel Montero Sport and the Montero for the permits, after successful negotiations with our principals. We understood early that the permit scheme would be a great opportunity during a time where taxes are extremely high for retail sales among other challenges. Today these two vehicles we offer have become the most popular options in the market.”

He further emphasised that a strategic decision the company had taken a few years ago to minimise the impact from various macro-economic factors that affect the industry had paid off. “Today we have products for almost every application and requirement.”

In support of this point, the Group’s provisional financial statement revealed an impressive contribution to its bottom-line from Unimo Enterprises Ltd. and Orient Motor Company Ltd., which are both fully-owned subsidiaries of UML, marketing brands such as Perodua and Chinese brands JMC, Zotye and DFSK.

He said that the Group’s priority now is to further strengthen its commitment to the highest levels of service excellence, noting that its branch network expansions around the island had made service facilities more accessible and as a result captured otherwise lost after sales income. He underlined the important contribution made by the Group’s primary workshop, not only in terms of financial value but also in ensuring that customers get industry-best after-sales services.

The Group’s earnings per share for the year under review was Rs. 29.92, which was a 12% drop from the Rs. 33.91 achieved last year. The strong balance sheet UML has is reflected in the 109.57 NAV per share achieved as at 31 March 2013.

The United Motors Group is looking ahead to exciting new possibilities in the year ahead with launches of several new products during the course of the year. It has partnerships with some of world renowned brands, including Mitsubishi passenger and Fuso commercial vehicles from Japan, Perodua compact cars from Malaysia, JMC commercial vehicles, DFSK mini trucks and Zotye compact SUVs from China, Yokohama tyres from Japan, JK tyres and Mak lubricants from India, Valvoline lubricants and Eagle One car care products from the US, and TVS motorcycles and three-wheelers from India.