UML records Rs. 519.7 m profit after tax
United Motors Lanka PLC (UML) completed yet another successful year,
sustaining its consistent record of profitability and growth and the
Group as a whole, earned its highest ever profit in the financial year
2007/08 reporting a profit after tax (PAT) of Rs. 519.7 million which is
an increase of 21.2 per cent over the previous year.
The parent company, UML, reported a turnover of Rs. 5,664.6 million
which reflects a growth of 37.5 % over the previous year whilst the
group turnover of Rs. 8,395.1 million recorded an increase of 24.5%.
UML has maintained a healthy balance sheet with a strong reserve base
of over Rs. 2 billion.
In addition to the strong financial performance, the company
rationalised some of its business operations during the year, trimming
costs and improving efficiencies, all of which contributed to the
increase in profitability during 2007/2008
The high finance cost was one of the biggest challenges the company
faced, escalating by over 200% and sharply increasing the stock holding
The depreciation of the rupee against the Japanese Yen by
approximately 11% particularly in the latter part of the year increased
the cost of vehicle imports. High inflation and the high cost of
borrowings impacted on the purchasing power of customers, which in turn
affected sales in the passenger vehicle segment.
A notable feature in 2007/08 was the incremental profit earned as a
result of supplying 1,120 Mitsubishi vehicles by UML, to senior
Government officials who were eligible to import vehicles on
The market for trucks continued to grow last year, and Mitsubishi
Fuso Canter held a 56% market share in the brand new Japanese truck
This segment of the business recorded a sales growth of 70% last
UML as throughout the years retained its focus on the core business
of selling brand new Mitsubishi vehicles as the sole distributor for
Mitsubishi Motors Corporation of Japan and providing after sales
services to Mitsubishi vehicle users.
However being responsive to the changing environment and as warranted
by business strategy the company has, over the years, diversified its
business portfolio and as a result now has five subsidiary companies and
a diversified jointly controlled entity in the Group.