Trans-China Automotive VI2 has reported a net loss of RMB19.5 million ($3.8 million) for the 2HFY2022 ended Dec 31, 2022, down from the profit of RMB51.9 million for the corresponding period the year before.
Other comprehensive losses, including the currency translation difference, stood at RMB23.7 million during the 2HFY2022.
The group’s profit for the year – or earnings – fell by 83.1% y-o-y to RMB21.0 million. Total comprehensive income for the year fell by 88.8% y-o-y to RMB14.1 million.
During the 2HFY2022, revenue fell by 3.7% y-o-y to RMB1.98 billion as the group’s sale of automobiles revenue and provision of after-sales services both fell. Revenue for the FY2022 fell by 10.8% y-o-y to RMB4.03 billion for the same reasons.
According to the group, its sale of automobiles segment was “hard hit” during the year especially in the 4QFY2022, which was traditionally busier. The drop in revenue was due to lockdowns and Covid-19 infections after the measures were lifted. With the lower sale in automobiles, demand for after-sales services fell as well on lower car usage and mileage due to Covid-19 restrictions.
For both the 2HFY2022 and FY2022, agency revenue stood at RMB3.2 million under its agency dealership business agreement.
2HFY2022 gross profit plunged by 70.1% y-o-y to RMB50.0 million while FY2022 gross profit fell by 46.9% y-o-y to RMB197.1 million. The lower gross profit were due to an overall decline in gross profit margin as more discounts were offered during the period.
Other income increased by 52.6% y-o-y to RMB73.6 million for the 2HFY2022 and grew by 23.5% y-o-y to RMB122.9 million in the FY2022. The higher other income was primarily due to higher commissions per car from financing and trade-in of pre-owned vehicles which was partially offset by a decrease in insurance rebate and registration income.
Operating profit fell by 111.9% y-o-y to a loss of RMB10.0 million for the 2HFY2022 and fell by 71.7% y-o-y to RMB59.4 million for the FY2022.
See also: IHH Healthcare’s 3QFY2024 patmi remains flat at RM534 mil
2HFY2022 loss before income tax stood at RMB28.6 million, down from RMB66.2 million in the 2HFY2021. For the FY2022, profit before income tax fell by 82.7% y-o-y to RMB28.2 million
As at Dec 31, 2022, cash and cash equivalents stood at RMB106.3 million.
A final dividend of RMB0.0068 per share was proposed for the period compared to the RMB0.0257 per share that was proposed in the same period the year before.
This year’s final dividend comes up to a total payout of RMB4.0 million or 19.0% of the group’s FY2022 earnings.
In its outlook statement, the group says it expects market conditions to remain soft in the immediate term as China “gradually emerges out of a sluggish economy”. In the medium term, the group expects the Chinese economy to improve on consumer spending spurred in part by high savings rate over the last two years.
“After operating under tough conditions the past year, we are now looking forward to ride on the consumption recovery, notwithstanding the ongoing macroeconomic challenges. With our expansion plans already in motion, we are better positioned in an eventual recovery of the Chinese economy,” says Francis Tjia, the group’s executive chairman & CEO.
On the group’s opening of its second Genesis showroom in January, Tjia called Genesis a “strong brand with beautifully designed automobiles that have gained traction and popularity in the markets where it has been launched”.
“We secured this brand during pandemic times and we were the first to offer it in Guangdong province. Now that Covid-related restrictions have been eliminated, we are very excited to present and market this new luxury brand properly to our customers. We believe the brand will do as well in the China market as it had done elsewhere,” he adds.
Shares in Trans-China Automotive closed flat at 15 cents on Feb 23.
