Geely profit slumps 40pc

Business | Reuters and Stella Zhai 22 Aug 2019

Geely Automobile's (0175) net profit for the first six months this year dropped by 39.89 percent year-on-year to 4 billion yuan (HK$4.4 billion) amid a sustained downturn in the world's biggest auto market, with no interim dividend declared, and it forecast an uncertain outlook for vehicle demand for the rest of the year.

Revenue decreased by 11.45 percent from a year ago to 47.56 billion yuan, with a total sales volume of 651,680 cars, decreasing 15 percent compared with the same period of last year. Retail sales volume during the same period, however, grew by 5 percent from a year ago with higher retail market share at 6.5 percent for passenger vehicles in China, Geely said, adding it plans to launch at least eight new or revamped models in the next 12 months.

Profit in the first half "was negatively affected by higher discounts and incentives to reduce dealers' inventories ahead of the official implementation of China 6 emission standards in some areas," said Geely, referring to a stricter vehicle emissions standard China implemented in July.

Although the Chinese government had started to introduce measures to stimulate automobile demand, the passenger vehicle market has shown little sign of improvement, the China-US trade dispute also appears to have worsened further, resulting in huge uncertainties for demand in China in the remainder of the year, it said.

Shares of Geely dipped 0.54 percent to HK$11.04 yesterday.

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