United Motors Group achieves highest ever profit of Rs. 2.2 b in FY12

United Motors Group announced strong financial results for the year ending 31 March 2012. During the year under review, the Group achieved a turnover of Rs. 20.8 billion and a post-tax profit of Rs. 2.27 billion which compares with a post-tax profit of Rs. 907.8 million achieved during the previous financial year.

Commenting on the financial performance, UML CEO/Executive Director Chanaka Yatawara said, “UML’s increased profitability was due to a multitude of factors. From an organisational point of view, UML’s strategic price negotiations with its principals, strong cost management framework, introduction of new products, and expansion of the branch network, all contributed to the strong financial performance. On the macro-economic front, the reduced import duties on motor vehicles, lower interest rates and Government decision to issue duty free permits created an economic climate conducive to our industry.

Mitsubishi vehicle sales division recorded a sale of 2,652 units up from 928 units in the previous year which is a 186% increase while the company also saw a significant increase in the sale of genuine parts and workshop services as a result of the increased number of vehicles in the market.

He further stated that UML’s 100% subsidiary, “Unimo Enterprises Ltd.,(UEL) also showed a strong performance, fuelled by the sales of the fast moving Perodua Viva. During the year, Unimo sold 4,446 units of the Perudua Viva – an increase of 159%.”

UEL’s Chinese Division which markets JMC commercial vehicles and Zotye compact Sports Utility vehicles also performed exceptionally well recording a sale of 712 units – up from 139 units last year which was a 412% increase.

UML’s joint venture, TVS Lanka, also contributed significantly towards the bottom-line, recording 2 wheeler sales of 37,432 units – up from 25,494 during the previous year which was an increase of 46%.  The 3 wheeler segment also showed growth compared to the previous year.

The groups Earnings per share of Rs. 33.83 which was an increase of 151.9% in comparison to last year reflected the strong performance by the group for the year. Further the excellent results enabled UML to declare the highest ever dividend payment in its history which was Rs. 9 for the year ended 31 March 2012. The results further pushed up the group’s net asset per share by 46.56% to Rs. 86.81.

Yatawara, however, stated that this financial year is going to be more challenging with the recent increases in duty, the devaluation of the currency and the higher interest rates. UML has, however, over the last few years focused on building a portfolio of commercial vehicles that cater to most segments and applications. This segment has not been affected with the changes in duty, and as a result the company will focus more on this sector, while the assembly operation and after sales services would also help minimise the negative impact.

The United Motors Group has a history of over 65 years in the motor vehicle retail industry and over the years has developed strong partnerships with world renowned brands which include Mitsubishi passenger and Fuso commercial vehicles from Japan,  Perodua compact cars from Malaysia, JMC commercial vehicles, DFSK Mini trucks and Zotye compact SUVs from China, Yokohama tyres from Japan, JK tyres and Mak lubricants from India and Valvoline lubricants and Eagle One car care products from USA, TVS two and three wheelers from India.