Tianjin Faw Xiali Automobile (000927) filed its net profit declined 84 percent year-on-year to 46.03 million yuan in the first half despite revenue growth of 11.81 percent to 5.46 billion yuan. Investment returns slipped due to lower contributions from affiliate Tianjin Faw Toyota Automobile, which was affected by the earthquake in Japan. Lower value added, lower profitability, greater dependence on investment return, as well as higher material costs all stressed its earnings, the company said.
Faw Toyota produced 198,014 cars and sold 197,196 in the first half. It earned net profit of 1.49 billion yuan during that period and contributed 416 million yuan investment return to Faw Xiali based on its holdings of 30 percent, declined by 300 million yuan year-on-year.
In the first half, Faw Xiali’s automobile production and sales grew 17.27 percent and 12.47 percent year-on-year to 147,126 cars and 140,635 cars, respectively. Gross margins rose 0.74 percentage point year-on-year to six percent.
Parent company China FAW Group Corporation announced last year that it would inject Faw Xiali and Faw Car (000800) into a new subsidiary through which the group will be completely listed. The subsidiary’s establishment was approved by the State-owned Assets Supervision and Administration Commission this year.
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