AviChina Industry & Technology posted a threefold increase in losses to 1.03 billion yuan (HK$1.15 billion) last year due to a bigger deficit at its car division and decline in margins at its helicopter unit.
The losses translate to 22.1 fen per share for shareholders, compared with 7.1 fen in the previous year when the company reported a loss of 331.08 million yuan.
The board recommended no final dividend for the year.
The aviation segment saw a 20.3 per cent jump in sales to 5.3 billion yuan after it sold 120 helicopters, up from 96 in 2006. The increase in delivery of fuselages for EC-120 helicopters contributed to the growth.
Gross margin in the helicopter business fell 2.2 percentage points to 12.83 per cent last year as the company kept selling prices unchanged even as raw material prices rose.
Sales of cars decreased 11.6 per cent to 11.2 billion yuan. Operating losses rose to 852.8 million yuan from 651 million yuan due to severe competition.
'The company's strength lies in aircraft manufacturing. Its [car] brands, from Hafei to Changhe, have recorded bad sales these past few years because competitors, such as Changan and Wuling, boosted sales aggressively,' said car industry analyst Matthew Kong of Fitch Ratings.