FAW Burdens 50 Million Net Loss in Q3
11th Nov reported by National Business Daily
Though 2011 is coming to the end, FAW Group has not seen much progress in its yearly ‘must-done’ task of stock market listing. It still seems a long way to go for FAW to improve its personnel management, clarify the ownership structure and enlarge sales for its self-owned brands.
FAW Car Limited Company, one subsidiary of FAW Group, has made limited achievement this year. As shown in its Q3 report, the operating revenue of the company from Jan to Sept 2011 is 25.7 billion yuan, down 4.08% from a year earlier. The net profit for its stakeholders dropped by 57.79% to 0.754 billion yuan. Both the earnings and fully diluted earnings per share suffered a yearly decline of 57.79%. The net cash flow in the operating process is minus 2.1 billion yuan, and plummeted 157.92% from a year earlier.
As shown by the analyst report from Central China Securities, FAW Car Limited Company ranked second to last in terms of sales growth in Q3 with a yearly decline of 26.45%. The major cause of such unsatisfactory performance seems to be the increasing advance payment expensed at the end of Q3 on its construction projects and the purchase of imported auto parts. In August this year, despite the overwhelming capital pressure, the company still invested 3.5 billion yuan in its vehicle expansion project.