Geely Automobile Holdings has reported a hike in its first half net profits as its growing stake in a number of car making joint ventures began to bear fruit.
Net profits for the six months reached CNY595.9m, up from CNY242.8m a year earlier. The rise was driven by a leap in revenues to CNY5.95bn from CNY67.1m.
“In the first half of 2009, the group continued to deliver a strong set of results with both its sales volume and profitability reaching record highs during the period, despite challenging market conditions, especially in our major export markets. The strategic transformation implemented since mid-2007 has significantly enhanced the group’s capabilities to deliver sustainable growth under difficult economic and market conditions,” said Li Shu Fu, the company’s chairman.
Geely Automobile upped its stake in its five auto joint ventures from under 50% to over 90% following a deal with its parent in July 2008.
The five joint ventures include Zhejiang Geely Automobile and Shanghai Maple Guorun Automobile.
“Despite continued difficult market condition in the group’s major export markets, the group’s performance in the first half of 2009 was very encouraging, helped by the strong demand for economy sedans in the China market, mainly as a result of the Chinese government’s automobile stimulus package promulgated at the beginning of 2009,” Li said.
The group sold 137,758 vehicles in the first six months of 2009, up 29% from the same period in previous year, achieving 55% of the full year sales volume target of 250,000 units.