| Financial review |
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Overview |
The Group faced a challenging year marked by a marginal drop in vehicle sales volumes; increasing interest; escalating costs in the backdrop of higher rates of inflation. In essence it was a battle to increase market share in order to maintain or achieve higher volumes and to control costs necessitated by a shrinking market. Results that were well below expectations during the first three quarters were mitigated to some extent by an encouraging fourth quarter. A decline in profits was inevitable in an unsupportive business environment.
The rising interest rates discouraged ‘capital goods’ sold by the Company which are mostly financed by borrowings. The vehicle import statistics on this page show the extent to which vehicle imports into the country in the served markets have declined. The Group’s strong base of intellectual capital provided the resilience for a fourth quarter recovery and end the year with a profit before tax of Rs. 344 mn (2006/07 - Rs. 513 mn), which was significantly less than the budget.
The vehicle imports for the last five years are given below: |
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| Vehicles (No. of Units) |
2007 |
2006 |
2005 |
2004 |
2003 |
| Buses |
2,637 |
3,346 |
2,069 |
2,167 |
1,949 |
| Private Cars |
22,603 |
27,578 |
17,283 |
19,116 |
21,184 |
| Goods Transport Vehicles |
18,408 |
20,436 |
14,262 |
10,703 |
11,014 |
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| (Source: Central Bank - Annual Report 2007) |
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