DIMO Group pretax profit grows 51% to Rs. 382 million

The Dimo Group's core business pursuits lie within the country's transport industry. In this context the increase in tariffs imposed by the Government continues to adversely affect the auto industry.

A good barometer would be the number of vehicle registrations for the year 2005 compared to 2004.

Passenger cars, a core segment for Dimo, declined by 9.6 %. The only two segments to show an increase were buses and land vehicles, said Chairman, Managing Director/CEO A. R. Pandithage in the annual sport for the financial year ended March 31, 2006.

The group turnover for 2005/06 grew 38% (58%-2004/05) over the previous financial year recording 10.5 billion as against 7.5 billion last year.

Group profit before tax grew 51% to Rs. 382 million as against Rs. 254 million last year. He said our business segments performed to expectations, with the vehicles segment continuing to be our best performer whilst grappling with the already mentioned high tariff regime.

The Dimo Group counts 56 leading international brands within its portfolio. The diversity of our portfolio lets us offer a wide array of products from world leaders across all our business segments. In turn, our product portfolio spans the gamut, from "musts" for living, to "privileged to have" luxuries and other state-of-art the solutions.

For the year in review, substantial investments in capital, human resources and processes were necessitated by the phenomenal growth in value generated.

Increase in working capital requirements, particularly in the vehicles segments, required further investments.

Significant capital expenditure was made to support improvements in the areas related to IT to maximise efficiency and effectiveness of the processes. Workshop improvement was another area of high capital expenditure.

Investments were also made to improve systems and processes in support and maintenance of our ISO 9001: 2000 and 14001: 1996 certifications.

As regards external investments, our tyre re-trading venture got off the ground with the commencement of a factory in Homagama. A total investment of Rs. 41 million has been committed to this enterprise. We have also revived Dimo Industries Limited to handle this business.

The company has also committed in investing towards the setting up of a manufacture of auto filters. Dimo will invest Rs. 5.99 million to acquire 49.9% of the share capital of Dimo KLN industries (Pvt) Ltd., which will be incorporated for this purpose.

Our dividend pay out policy is to pay an above average dividend after retaining for working capital and capital expenditure.

Despite the turbulence of years past from political uncertainty, the devastating tsunami and the unfriendly tariff regime that besets the auto industry.

The company has shown good resilience to emerge from these shadows to post outstanding results in its recent history.