EDARAN Otomobil Nasional Bhd (EON) has reported a 10.4% increase in its group pre-tax profit of RM905.9mil for the financial year ended Dec 31, 2002 compared with RM820.3mil in the previous year.
Group turnover, however, eased 1.6% to RM7.43bil from RM7.55bil previously. For the year under review, EON's group net profits rose to RM476.6mil against RM449.9mil the previous year.
On a quarterly basis, group pre-tax profit increased by 25.6% to RM261.8mil in the fourth quarter from RM204.8mil previously.
EON said the increase was substantially due to the higher pre-tax profits from EON Bank group arising mainly from lower general allowance for doubtful debts. Also included in the group's current quarters earnings is a net gain of RM12.2mil arising from the divestment of interest in subsidiaries and an associate.
Under motor, total industry volume for passenger car sales last year recorded a growth of about 10% to 359,934 units from 327,447 units sold in the previous year.
EON's managing director, Datuk Adzmi Abdul Wahab said in a press statement that the company's new car sales, however, decreased from 135,578 units to 127,859 units last year due to increased competition resulting in a decline in market share from 41% to 36%.
The net profit of the group's motor operations declined to RM215.8mil last year, down 20.7% from RM272.2mil due to higher marketing and promotional costs and lower sales volume.
The group's financial services sector also registered higher net profits of RM140.1mil, up 18.9% from 2001 due to lower allowances for loan loss, higher net operating income on a larger loan base and higher fee and commission income, partly offset by higher allowance for diminution in value of investment securities.
The EON Bank group posted a pre-tax profit of RM390.3mil for the year ended Dec 31, 2002 – its highest on record and representing an increase of 19% from the previous year. This was achieved on the back of a net income of RM867.2mil, up 13% from a year earlier.
EON Bank Bhd's holding company, EON Capital Bhd, reported a pre-tax profit of RM37.2mil for the financial year ended Dec 31, 2002 after incorporating the one-month consolidated results of EON Bank, which became wholly owned subsidiary on Dec 2 last year pursuant to the EON Bank's scheme of arrangement between the bank and its shareholders.
The group's total net loans increased by 18.3% to RM20.5bil for the period under review compared with RM17.4bil in 2001. The group's retail loan portfolio under its individual banking division increased by 19.2% last year while the enterprise banking division reported a corporate loan growth of 5.2% with emphasis on lending to small- and medium-sized enterprises.
Loan quality for the group has also shown improvement with net non-performing loans ratio at 4.9% compared with 5.7% previously.
EON Bank group chairman Tan Sri Mohd Saleh Sulong said in a statement yesterday that the group had turned in a highly commendable performance in the last financial year to record one of the group's best achievements to date.
The group's newly listed status through EON Capital Bhd had helped to solidify its position as one of Malaysia's leading retail banks, he added. On EON's prospect, the company said mixed consumer sentiment in anticipation of AFTA and recent global tensions would continue to impact the automotive market and put pressure on sales volume and margins.
“The company is continuing to negotiate with Perusahaan Otomobil Nasional Bhd (PROTON) on the distribution status and hopes to resolve it by year end,” it added.
The financial services sector is expected to achieve a moderate growth this year.
The proposed reorganisation of the company's interest in EON Capital is scheduled to be completed during the year. A final gross dividend of 40 sen per share was recommended.
This would amount to a total of 490 sen per share for financial year ended Dec 31, 2002.
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