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| Sunday, 5 September 2004 |
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| News Business Features Editorial
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DIMO records net profit of Rs. 100 million Diesel & Motor Engineering Co. Ltd; (DIMO) according to the annual report released for the year ending 31st March 2004 has shown a record impressive growth in many areas. The group turnover has increased to Rs. 4796M. in comparison to Rs. 3404M. growth recorded for the previous year which is an increase of 41%. The pre-tax profit has recorded Rs. 148m in comparison to Rs. 58M recorded for the year 2002/2003, with a growth of 152%. The net profit for the year under review is Rs. 100M an all time record compared to Rs. 38m for the previous year, with a growth of 158%. The company increased the paid-up capital from Rs. 60 million to Rs. 90 million in 2003 and earning per share on the increased capital is Rs. 11.58 presently trading at a P.E. of 5.4 substantially cheaper compared to overall P.E of 10.5 and sector P.E of 9.4. During the past 12 months the share has peaked at Rs. 99. The group has increased its capital and revenue reserves from Rs. 613 million to 742 M this year and the book value of a share is Rs. 82.49. DIMO which commenced operations in 1939 has diversified into many segments of businesses eg. Commercial and Passenger vehicles, MRF, Michelin tyres, Mahendra Tractors, Siemens, Telecom Products and non franchise auto parts. The group has maintained business relationship with world renowned companies such as Mercedes Benz, Robert Bosch AG, GMBH of Germany, BF Goodrich, Siemens AG of Germany, Komastsu, Tata of India, Michelin and several other companies. Recently the company was appointed sole distributor for Chrysler vehicles in Sri Lanka by M/s. Daimler Chrysler, Among the new range of products introduced during the year are Chrysler vehicles, Tata passenger cars, Anaesthesia and Monitoring equipment from Drager Medical, Bosch Packaging Machines, S.v. Robotics, Conveyer Systems, SPECTRUMKIND supermarket shelving, DEMag goods hoists and Dock Levellers, MRF Industrial/Earth mover tyres and IPWT garbage and sewerage disposal equipment. According to the report, vehicle segment again fared well with a notable performance by the commercial vehicles business. The Auto parts and service segment achieved the best segment results with all units including franchise and non franchise spare parts and accessories and passenger and commercial vehicle repairs contributing to this success. The construction and material handling machinery showed recovery from a negative segment result in the previous year and the group expects to improve on the recovery made. The group has invested in new technology in the form of Plant and Machinery to the tune of Rs. 35m and has further invested Rs. 98m on IT to-date. Total expenditure of the group on property, plant and equipment during the year amounted to Rs. 80m. The recent appointment of the company as sole distributor for renowned Chrysler vehicles in Sri Lanka by M/s. Daimler Chrysler is considered a major achievement. The Chairman states in his review that this involves substantial investment likely to be funded by banking finance and possible rights issue. The company has already released officially two vehicles under the agency namely Vetro Pt Cruiser and people-mover Grand Voyeger. It was possible for the group to recommend the final dividend of 20% on top of an interim dividend of 15% already paid due to excellent performance. The group further approved a bonus of 1 for 9 recently. The Chairman has expressed the view that the performance of the year has given cause for optimism as regards the future and it is expected the group would also record a similar growth during the current year. |
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