Geely Auto Says Full-Year Profit May Fall 50% on Ruble and SalesBloomberg News
Chinese billionaire Li Shufu’s Geely Automobile Holdings Ltd. said it expects full-year net income to fall about 50 percent from 2013 because of the slumping Russian currency and declining sales.
Depreciation of the ruble resulted an unrealized foreign-exchange loss from operations in Russia, Geely said in a statement to Hong Kong stock exchange yesterday. Sales volume dropped 26 percent in the first 11 months of the year, led by a 49 percent decline in export markets, it said.
Geely’s full-year net income was 2.66 billion yuan ($430 million) in 2013, the company said.
The ruble sank beyond 80 per dollar yesterday, a record low, before rebounding after Economy Minister Alexei Ulyukayev denied speculation that the government would turn to foreign-exchange restrictions to stop Russians from converting money into dollars.
The Hangzhou, China-based carmaker has started to increase the retail prices of vehicles in Russia and will accelerate localization of production in major export markets to reduce foreign-exchange risks, it said.
Geely said its performance in China has rebounded since August after it reorganized its domestic sales and marketing system and accelerated the introduction of new and upgraded models.
Li is revamping Zhejiang Geely Holding Group Co., the company’s parent, after setting Swedish automaker Volvo Cars on a five-year renewal. The parent said this week it will replace the Emgrand, Gleagle and Englon marques introduced in 2009 and market all future models under a single “Geely” brand.
— With assistance by Bonnie Cao