HONG KONG: Brilliance China issues profits warning
Brilliance China Automotive Holdings has issued a profits warning to shareholders.
In a statement, the board of directors said it expects that the consolidated results of the company and its subsidiariesfor the year ended 31st December 2004 will be "materially adversely affected due to the significant slowdown in growth in the domestic demand for automobiles in the People's Republic of China and intensified price competition during the year".
"As stated in the interim report of the group for the six months ended 30th June 2004, the implementation of macro-economic policies and austerity measures in the PRC has resulted in a significant slowdown in growth in domestic demand for automobiles since the second quarter of 2004. The general slowdown of the automobile industry in the PRC also intensified price competition among automobile manufacturers," the statement added.
"As a result, the sales volume of automobiles and profit margin of the froup for the year 2004 decreased as compared to the year 2003, particularly for the Zhonghua sedan. The low sales volume of the Zhonghua sedan resulted in an operational loss for the sedan business and the board is considering making a provision for impairment of intangible assets relating to the development of the Zhonghua sedan."
The statement did not give any financial details and said full results for the year would be announced in April.