BMW joint venture helps Brilliance lift profit 52pc
Brilliance China Automotive, the Chinese partner of German carmaker BMW, posted a 52 per cent rise in first-half profit from a year ago, driven by increased profit contribution from its joint venture BMW Brilliance as sales boomed.
The Shenyang-based carmaker's profit for the six months to June totalled 2.03 billion yuan (HK$2.55 billion), against 1.33 billion yuan in the same period last year, a statement filed with the Hong Kong stock exchange said yesterday. Revenue for the period fell 8.5 per cent to 2.57 billion yuan, dragged down by a 12.1 per cent drop in minibus sales.
The strong profit growth was buoyed by a 60 per cent increase in profit contribution from BMW Brilliance, the 50-50 joint venture with BMW. Profit contributed by the venture rose to 2.1 billion yuan in the first half of this year, from 1.31 billion yuan in the year-earlier period, the statement said.
The profit was backed by robust car sales of the venture, which sold 105,692 units in the six months, an increase of 30.8 per cent from the same period last year. A total of 63,536 5 series cars were sold, a rise of 28.6 per cent, while the BMW 3 series posted a 57.8 per cent growth in sales to 32,126 cars.
A Shanghai-based analyst said the profit growth in the joint venture was partly driven by the rise in the yuan against the euro during the period. This allowed the company to book foreign exchange gains. "The strong profit growth will be sustainable in the second half as we see robust demand in car sales," he said, adding the company was likely to benefit from foreign exchange gains in the second half.
Wu Xiaoan, chairman of Brilliance China, said in the statement that the company planned to launch a new China-only model under the 5 series and an additional 3-series variant in the second half.
He also said at the company's interim results announcement in Hong Kong that he expected car sales to rise 30 per cent next year, outperforming its competitors.
The company declared an interim dividend of 10 HK cents per share. No interim dividend was given for the same period last year.
Shares in Brilliance China ended 1.33 per cent higher at HK$10.66 yesterday, beating the 1.21 per cent gain in the benchmark Hang Seng Index.