DIMO posts 34% increase in pre-tax profits to Rs 512 m in 2006/07

Diesel and Motor Engineering PLC (DIMO) has recorded a pre tax profit of Rs. 512 mln for 2006/2007, an increase of 34% over the previous year.

Group turnover was Rs. 13 bn, a growth of 23.6% but profit after tax grew only by 13.8% during the year under review due to high tax payments, said the Chairman, Managing Director/CEO A.R.Pandithage.

The board has paid an interim dividend of Rs.3 per share while a final dividend of Rs. 3 per share has been proposed for the financial year 2006/2007.

The dividend outflow will be enhanced by the increase in share capital.He said that the company will continue with the strategy of remoulding the product mix. We will expand our non auto business that has growth potential in areas such as power engineering and building technology.

The company is also venturing into new areas such as car park management systems, consultancy services with regard to warehousing and material handling and the supply of health care consumables.

Pandithage said that the company is facing two main challenges in the short term including responding to changes in the external environment and managing the working capital.

The high tariffs and taxes, and high interest rates that are now part of the external regulatory regime makes maintaining market shares and selling our products a considerable challenge.

In addition making our working capital in the midst of a volatile interest regime is another challenge. For some years now it has received our close attention and has become a key component of the Dimo culture. During the past year working capital has increased by 11%.