EON reports lower profits as car sales dip


KUALA LUMPUR: Edaran Otomobil Nasional Bhd (EON), which recorded a more than 31% drop in new car sales for the first three months, posted lower unaudited net profits of RM62.2mil for the first quarter ended March 31, 2003, compared with RM105.9mil in the same period last year. 

The group also registered a lower revenue of RM1.476bil against RM2.008bil in the same period last year. 

New car sales declined to 23,621 units in the Jan-March 2003 from 34,536 units sold in the first three months of 2002. 

EON said in a statement the financial services sector contributed a significant 56% of the group’s net profits for this year’s first quarter results. 

The financial services sector registered higher net profits of RM34.6mil, up 41.6% from RM24.5mil in 2002 due mainly to lower net interest suspended. 

The sector also chalked up a higher revenue of RM465.5mil from RM433.7mil. 

The group expects competition in the banking and financial services sector to remain intense in the current year and interest margins were expected to come under pressure. 

EON said the banking sector was cautiously optimistic of achieving moderate growth in 2003. 

During the same period last year, net profits were mainly driven by the group’s motor operations. 

It expects the remaining period of the year to be challenging for the motor sector in view of the difficult trading conditions in which the company operates. 

Accordingly, contributions from the motor sector were expected to be lower in the remaining period of the year. 

Total industry volume for passenger car sales from January to March fell by about 8.3% to 81,328 units. 

Its managing director Datuk Adzmi bin Abdul Wahab said the lower new car sales in the first three months of 2003 was due to increased competition from the national and non-national marques. 

As such, net profits from the group’s motor operations of RM23.8mil was 58.9% lower than the same period in 2002 at RM57.9mil. 

Meanwhile, revenue for the motor operations also dropped to RM1.015bil from RM1.581bil. 

EON said mixed consumer sentiment in anticipation of the Asean Free Trade Area (AFTA), increased competition and global uncertainties would continue to impact the automotive market and put pressure on sales volume and margins. –Bernama  

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