DIMO December net down 35% over slower vehicle sales

Slower vehicle sales saw the profits of Diesel & Motor Engineering PLC (DIMO) sliding over 35 percent during the December quarter (3Q18) compared to the corresponding quarter of the previous year (3Q17), the interim financial accounts released to the Colombo bourse showed.

DIMO reported earnings of Rs.21.08 a share or Rs.188.3 million for 3Q18, against Rs.32.23 a share or earnings of Rs.286.1 million in 3Q17.
Revenue for the quarter under review fell 9 percent year-on-year (YoY) to Rs.11.4 billion.

The DIMO share last traded at Rs.472. The group net asset value per share, as at December 31, 2017, stood at Rs.1,179.61.  

For the nine months ended December 31, 2017, DIMO reported earnings of Rs.34.25 a share or Rs.305.3 million, compared to Rs.71.08 a share or Rs.630.9 million reported for the corresponding period of the previous year.

Revenue fell 4 percent YoY to Rs.32.2 billion.

The key vehicle sales segment saw a dip in revenue to Rs.21.3 billion from Rs.24.3 billion, while the segment results stood at Rs.965.5 million, down from Rs.1.3 billion YoY.

DIMO holds the local agency for Mercedes Benz and Tata vehicles in Sri Lanka. 

Sri Lanka’s motor vehicle registrations have slowed down significantly due to the monetary restrictions and relatively higher taxes. However, the 2018 budget presented last November slashed taxes on electric vehicles and cars with smaller engines. Meanwhile, despite the revenue gains, the segment results showed a slight slippage to Rs.512 million, in the vehicle after-sales segment.

The marketing and distribution segment recorded higher revenue gains and positive segment results YoY.

The other two business segments of DIMO—construction material and handing equipment and electro-mechanical, biomedical and marine engineering—reported more or less flat revenues and results.  

The state-controlled pension fund, the Employees’ Provident Fund, remained the single largest shareholder of DIMO with a 20 percent stake, as at December 31, 2017.