The United Motors Lanka (UML) group achieved a profit after tax of Rs. 968 million for the first quarter of 2012/13 in comparison to Rs. 411 million achieved a year earlier, which is an increase of 135 percent. Group turnover increased 67.5 percent to Rs. 6.2 billion from Rs. 3.7 billion a year ago.
Commenting on the Group’s performance, Chanaka Yatawara, CEO / Executive Director said that the performance was due to a combination of factors including, a diverse portfolio of vehicles including several brands of commercial vehicles which are not affected by the tax increase, income from the permit operation, healthy margin management by changing the marketing mix, low borrowings due to improved reserve situation and tight costmanagement. The UML group net asset per share as at 30th June 2012 rose to Rs. 95.21.
He however went on to say that the remaining 3 quarters would be very much more challenging due to theweaker rupee, restrictions imposed on credit granted by leasing and financial institutions and the increased tax on vehicles.
"Keeping these concerns in mind the group will pay more attention to expanding its after sales service capabilities to cater to the large amount of vehicles sold by the group in 2010 and 2011.The workshop and branches are now going through an expansion process to accommodate the 12,000 units we put into the market in the last two years.
"We are confident that if we have the facilities and resources in place, we would be able to attract a significant number of these new customers to patronize our after sales facilities, which should compensate to some extent for the volume drop expected from vehicle sales. We are also expanding our assembly operation as it has become more feasible to market assembled products due to the tax concessions offered versusthe higher taxation applied on imported vehicles. The assembly plant is expected to be ready to increase its capacity of the 1.3liter petrol Nomad compact SUV by October," he said.