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Sri Lanka’s United Motors net down 52-pct

ECONOMYNEXT – Profits at United Motors Plc, agents for Mitsubishi automobiles in Sri Lanka fell 52 percent to 107 million rupees in the December quarter as revenues plunged 28 percent, interim accounts showed.

The firm reported earnings of 1.07 rupees per share for the quarter. In the nine months to December United Motors reported earnings of 4.16 rupees per share on total profits of  420 million rupees, which fell 38 percent.

Revenues fell 28.7 percent to 3,490 million rupees and cost of sales also fell 32.2 percent to 2,711 million rupees, and gross profit contracted 13.1 percent to 778.8 million rupees.

Finance costs rose sharply by 42 percent to 105 million rupees, despite lower business volumes.

Sri Lanka’s car market has slowed amid credit restrictions and tax changes. Sri Lanka’s central bank brought credit restriction for motor cars after printing 680 billon rupees to generate a balance of payments crisis and lose 4.0 billion US dollars in forex reserves.

Due to long-standng Mercantilism people in Sri Lanka think BOP crises are caused by trade deficits in general and cars and oil imports in particular. During the 2015/2016 crisis however, oil prices collapsed. (Colombo/Jan26/2018)

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