CHINA: Dongfeng profit rises

By Graeme Roberts | 31 October 2013

Dongfeng Motor Group, which is in capital injection talks with PSA Peugeot Citroen, has booked a 39% rise in third quarter profit on the back of China's auto market recovery.

Net profit rose to CNY2.45bn (US$402.05m) during the July-September period, according to Reuters calculations based on nine-month earnings data released by the automaker.

Dongfeng made CNY1.76bn in quarterly profit a year earlier.

State-owned Dongfeng, which operates joint ventures in China with PSA, Nissan and Honda, said consolidated net profit during the first nine months rose to CNY7.95bn from CNY7.1bn a year earlier, up around 12%.

The results were weighed down by its Sino-Japanese car ventures that have struggled to fully recover following an outbreak of anti-Japanese sentiment last year.

PSA is preparing a EUR3bn ($4.1bn) capital increase in which Chinese partner Dongfeng and the French government would take matching stakes in the carmaker, people with knowledge of the matter told Reuters earlier this month.

A Dongfeng executive said last week the company is still weighing the benefits of investing in PSA, hinting a deal with the French carmaker could take a long time.