Brilliance China Automotive Holdings has announced unaudited consolidated net sales for the first six months of 2006 up 55.5% year on year to RMB4,348.6m ($US543.6m).
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The increase was primarily due to increased unit sales of Shenyang Automotive’s minibuses and Zhonghua sedans during the H1 period.
Shenyang Automotive sold 37,571 minibuses in the first half of 2006, up 27.5% on the same period in 2005. Shenyang Automotive sold 19,398 Zhonghua sedans in the first half of 2006, up 321.9%.
Unaudited cost of sales rose by 60.0% to RMB4,056.7m. However, the unit costs for minibuses and Zhonghua sedans decreased in the first half of 2006, mainly due to improvement in production efficiency and economies of scale together with the decrease in costs of components.
However, despite the increase in sales and decrease in unit costs, the overall gross profit margin of the group decreased from 9.3% for the first half of 2005 to 6.7% for the same period in 2006, as a result of continued price competition and a shift in product mix to lower-margin products.
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By GlobalDataUnaudited net equity in earnings of associated companies and jointly controlled entities increased from a loss of RMB29.8m in the first half of 2005 to earnings of RMB58.5m for the same period in 2006.
This was mainly attributable to the profits contributed by BMW Brilliance Automotive, the group’s 49% indirectly- owned jointly controlled entity in the first half of 2006. The joint venture achieved sales of 9,822 sedans in the first six months of 2006, an increase of 35.4%.
Unaudited net other income increased by 15.2% from RMB34.3m (US$4.1m) in the first half of 2005 to RMB39.5m (US$4.9m) for the same period in 2006. The increase was primarily due to a gain from the buyback of certain convertible bonds due in 2008 and a penalty payment received from a supplier for failure to deliver contracted volume before a pre-agreed deadline.
The group recorded an unaudited loss before taxes and minority interests of RMB190.3m (US$23.8m) in the first half of 2006 compared with RMB581.0m (US$70.2m) for the same period in 2005.
Chairman Wu Xiao An said: “Conditions in the Chinese automotive industry continued to be difficult and competitive in the first half of 2006. Despite this challenging environment, the Group’s operations and sales had improved compared to the corresponding period last year.
Looking at the second half of 2006, the gradual recovery in the Chinese automotive industry is expected to gather momentum, although the operating environment continues to be challenging. The group expects total revenues to increase in the second half of 2006 primarily due to the anticipated strong increase in sales of its Zhonghua sedans.
Brilliance China also believes that many of the marketing and repositioning strategies it has been pursuing have placed it in a better position to deliver satisfactory operating results and profits over the medium-term.
