By Joanne Chiu
HONG KONG--BYD Co. (1211.HK, 002594.SZ) expects stronger
earnings in the first quarter on the back of the launch of new car
models and China's support for green cars, after the Warren
Buffett-backed Chinese battery and car maker reported a 22% decline
in 2014 net profit.
The company, which is 9.1%-owned by Berkshire Hathaway Energy, a
unit of Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB), said
Sunday that net profit for the 12 months ended Dec. 31 totaled
433.5 million yuan (US$69.8 million), down from CNY553.1 million a
year earlier, as increased competition in the market for
conventional cars combined with a slowdown in China's auto market
to take a toll on earnings.
The decline in earnings was in line with the company's earlier
forecasts of a 21% drop in full-year net profit of CNY437.9
million. Its full-year revenue rose 11% to CNY55.37 billion from
CNY49.77 billion.
Despite the weak 2014 earnings, BYD said in a statement to the
Hong Kong exchange that it expects a first-quarter net profit of
CNY100 million to 150 million, sharply higher from the CNY11.97
million of net profit it reported in the previous year, benefiting
from China's support for green cars in a bid to curb pollution as
well as the launch of several new traditional gasoline-powered car
models that would help drive car sales.
"The Group's new energy vehicle business is expected to sustain
its strong growth momentum," it said.
The company's revenue from green-car operations increased by
about six times to around CNY7.25 billion in 2014, accounting for
nearly 28% of BYD's automobile business revenue.
Sales volume of BYD's plug-in hybrid car, the Qin, grew by nine
times in 2014, the company added, without giving exact figures. The
Chinese car maker and Daimler AG (DAI.XE, DDAIY) also in September
launched their jointly developed electric-car brand Denza.
China's passenger-car sales rose 9.9% last year, a solid result
but a marked slowdown from 2013 when sales grew 16%. About 19.7
million cars were sold in China in 2014, according to the China
Association of Automobile Manufacturers.
Write to Joanne Chiu at joanne.chiu@wsj.com
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