SORL Auto Parts, a Chinese manufacturer and distributor of automotive brake systems, said gross profit for the first quarter of 2012 was $12.2m, slightly lower than the $14.6m booked in 2011.
Gross margin was 27.4%, down from 28.1%, due mainly to higher material and labour expenses and the appreciation of the yuan.
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Net income more than halved to US$2.3m compared with $4.9m the previous year.
Operating income almost halved to $3.3m compared to $6.1m due to lower sales and gross profit and higher administrative expenses. Operating margin was 7.5% versus 11.7% in the first quarter of 2011 and 5.9% in the fourth quarter.
Q1 sales were $44.6m, compared to $52m the previous year. Revenue from the company’s domestic OEM customers was $25.8m, down 19.4%. Domestic aftermarket sales rose 14% to $9.8m but international sales fell to $9m from $11.4m.
SORL said sales fell due to the 11.4% decline in production of OEM commercial vehicles and the 32% decline of heavy duty truck production.
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By GlobalDataThe ongoing European debt crisis and currency depreciation in some markets propmpted some exprt customers to reduce stock levels while instability in some Middle East countries reduced their purchases.
But the increased number of vehicles in operation in China, stricter safety measures and the expiration of OEM warranties helped to increase SORL’s aftermarket sales.
For fiscal year 2012, the supplier expects net sales at approximately $225m and net income of about $14.6m.
