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Mainland carmaker Geely Automobile posted a 46 per cent fall in profit last year, dragged down by lacklustre exports and losses on operations in Russia, but the company sees a better year ahead, with domestic sales expected to pick up.
Net profit dropped to 1.43 billion yuan (HK$1.77 billion) from 2.68 billion yuan in 2013, the company said in a statement to the Hong Kong stock exchange. Slower sales and unrealised foreign exchange losses as a result of deprecation of the Russia rouble dragged down its profit, the company said. Net foreign exchange losses totalled 647 million yuan last year.
Analysts had predicted a net profit of between 1.31 billion yuan and 1.36 billion yuan.
Shares in the company rose 1.11 per cent to HK$3.64 in the morning session ahead of the results announcement.
The carmaker issued a profit warning at the end of last year as exports deteriorated and expectations of losses in Russia, its biggest foreign market, mounted.
Total revenue for the year dropped 24 per cent to 21.7 billion yuan.
The company sold 417,851 vehicles last year, down 24 per cent from 2013. Export sales volume declined by 49.8 per cent to 59,721 units, and it sold 358,130 units in the mainland market, down by 16.8 per cent.
A final dividend of 4.6 HK cents a share was declared.
Geely’s vehicle sales saw strong growth at the beginning of this year. In the first two months of this year, it sold 85,200 vehicles in the mainland market, up 77 per cent year on year.
“This year appears to be a better year for Geely given the initial success of the reshuffle of our sales and marketing system in China,” chairman Li Shufu said in the statement.
The restructuring had improved the efficiency of distribution, and the launch of new and upgraded versions of various models should enable Geely to perform better on the mainland, Li said.
Analysts are also upbeat about Geely’s performance this year, expecting its new flagship sedan model, the GC9, to stand out and boost sales.
The company said the outlook for exports markets was mixed, with regulatory changes, a weakening currency and political uncertainties likely to continue to disrupt vehicles sales in Russia.


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Geely sold 417,851 vehicles last year. Photo: Reuters

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Geely expects sales to pick up in the second half. Photo: Bloomberg

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Geely chairman Li Shufu

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