Jardine car unit sees profits crash
Jardine International Motor Holdings (JIMH), the Hong Kong-listed car-marketing arm of the Jardine group, yesterday revealed a 41.46 per cent slide in attributable profit, with a warning that operating environments were 'likely to remain difficult' this year.
JIMH - whose business includes the Zung Fu Mercedes-Benz car dealership in Hong Kong - said net profit declined to US$36.7 million for the year to December 31, down from $62.7 million.
It said the group's performance this year 'should be in line with last year'.
The company reported a fall in pretax profit to $49.5 million, down from $80.6 million a year earlier.
As a result, JIMH will slash its shareholder pay-out by 20 per cent to six cents per share, from 7.5 cents last year.
JIMH said it sold 32 per cent more cars last year than the year before, mainly as a result of its $89 million acquisition of the Appleyard Group in Britain in 1997, which includes a 48-strong dealership representing 23 marques.
JIMH in January launched a joint GBP30 million bid (about HK$375.41 million) with Ford Motor to acquire Dagenham Motors, the largest Ford dealership network in Britain.
On Tuesday, it said it had received acceptances representing 94.1 per cent of Dagenham.
'The group shall continue to look for attractive expansion opportunities both in the depressed markets of East Asia and in the more mature markets of Europe and the US,' JIMH said.
However, it said some of the recently acquired Appleyard operations were suffering from greater problems than anticipated, and 'results were well below expectations'.
Turnover rose 52 per cent to $3.55 billion, while earnings fell to 7.89 cents per share from 13.13 cents the previous year.
The group's operating profit fell 1.5 per cent to $74.3 million, down from $75.4 million the previous year.
Zung Fu said it saw only a small decline in profits, despite the prevailing recessionary conditions in Hong Kong.
In the mainland, JIMH's Southern Star arm, which sells Mercedes cars in the southern region, saw a sharp fall in deliveries and reported operating losses.
The Concorde Motors venture in India completed the establishment of seven dealerships for the sale and service of Telco cars.