United Motors records higher profits, revenue in 2Q despite challenges in auto sector

United Motors Lanka PLC (UML) posted a group profit of Rs.366 million for its September quarter (2Q21), compared to Rs.13.5 million in the corresponding period last year, supported by the increase in revenue and margins in vehicle sales, aftersales and lubricant business. 

The UML share closed at Rs.63.80 yesterday, Rs.3.60 or 5.98 percent up.

The group revenue for the period was Rs.4.3 billion, up from Rs.3.06 billion in the comparable period last year. 
The year-to-date group profit recorded was Rs.140 million, compared to a loss of Rs.185 million during the comparable period of the previous year. 

The second quarter earnings per share was Rs.3.63 while the net asset value per share as of September 30, 2020 had risen to Rs.128.24, from Rs.126.08 six months ago.

UML Group CEO Chanaka Yatawara said the profit growth was driven by all-round performance from the increase in revenue and margins in vehicle sales, aftersales and lubricants, supported by uninterrupted business operations. 

On the expenses front, there was a significant reduction in finance cost, due to the improved cash position and favourable interest rates. The net finance cost for the three months under review halved to Rs.52 million.

UML said despite the strict cost control measures undertaken across the organisation, employee salaries remained unchanged during the quarter.

Considering the challenges at the moment with the import ban on vehicles in place, UML said it would focus mainly on expanding its aftersales revenue, lubricant business and the construction equipment sector. 

UML is the sole agent for Mitsubishi vehicles in Sri Lanka. It also holds the agency for a few Chinese and Malaysian auto brands.