UML group profits soar in 1Q
The United Motors Lanka group achieved a profit after tax of Rs. 968 million in the 1st quarter of 2012 in comparison to Rs. 411 million achieved in the same period last year, an increase of 135%. Group turnover increased by 67.5% to 6.2 billion in comparison to 3.7 billion achieved in the 1st quarter of 2011/2012.
Commenting on the Group’s perfor mance, Chanaka Yatawara, CEO / Executive Director mentioned that the performance is due to a combination of factors including, a diverse portfolio of vehicles including several brands of commercial vehicles which are not affected by the tax increase, income from the permit operation, healthy margin management by changing the marketing mix, low borrowings due to improved reserve situation and tight cost management. The UML group net asset per share as at 30th June 2012 rose to Rs. 95.21.
He however went on to say that the remaining 3 quarters would be very much more challenging due to the weaker rupee, restrictions imposed on credit granted by leasing and financial institutions, the increased tax on vehicles etc.
“Keeping these concerns in mind the group will pay more attention to expanding its after sales service capabilities to cater to the large amount of vehicles sold by the group in 2010 and 2011.
The workshop and branches are now going through an expansion process to accommodate the 12,000 units we put into the market in the last two years. “We are also expanding our assembly operation as it has become more feasible to market assembled products due to the tax concessions offered versus the higher taxation applied on imported vehicles. The assembly plant is expected to be ready to increase its capacity of the 1.3liter petrol Nomad compact SUV by October he said.”