BEIJING, Oct. 30, 2009 (Xinhua News Agency) -- Dongfeng Automobile (600006.SH), a Shanghai-listed subsidiary of Chinese automaker Dongfeng Motor Corporation, reported its third-quarter financial results on Thursday.
During the first three quarters, Dongfeng Auto's main operating revenues increased about 6 percent to 10.4 billion yuan, while net income slumped 31.77 percent to 256 million yuan. Primary earnings per share stood at 0.128 yuan.
The company had a disappointing performance during the year's first half, mainly due to sluggish sales of the Dongfeng Cummins Engine, Dongfeng's joint venture with US-based Cummins Inc (NYSE:CMI) , also a major profit source for Dongfeng.
In the third quarter, the Dongfeng Cummins' engine sales improved amid recovery of China's commercial vehicle market, and cooperative management inside the company. Sales reached 12,530 units, 11,223 units and 15,721 units respectively, in each month from July to September, showing a clear upward trend.
However, Dongfeng Cummins's net income dropped 232 million yuan from a year earlier, despite sales growth in the third quarter.
Dongfeng Auto sold 20,364 vehicles in September, up 9.59 percent from one-year prior. This included 14,118 light vehicles and 6,246 SUVs, MPVs and pickups, each respectively up 6.56 percent and 17.81 percent year on year, according to sales data earlier released by the company.
Dongfeng Auto's net cash flows from operating activities soared 405.53 percent year on year to 2.49 billion yuan during the first three quarters, much higher than its 256-million-yuan net income. This reflects the company's efficient collection system.
The automaker said it had expanded its market for light truck products after the government launched an auto industry booster plan earlier this year. By the end of September, the company's currency funds reached 5.07 billion yuan. It is now in a good financial position and has a strong anti-risk capacity.
Sealand Securities said the company's sales expenses surged 66 percent year on year in the third quarter, reflecting the fact that it is now extending its sales network beyond the cities. The new sales network could be a major reason for the light-truck sales growth of recent months.
