SHANGHAI — China’s Geely Automobile Holdings on Monday booked a 43 percent drop in half-year profit as the coronavirus outbreak continues to trouble the world’s biggest auto market.
The result come as China’s overall auto sales slowly recovers from a virus-blighted start to the year. Sales climbed for the fourth consecutive month in July yet are still down 13 percent for the year to date.
China’s highest-profile automaker — due to group investments in Volvo Cars and Daimler — posted January-June net profit of 2.3 billion yuan ($331 million), it said in a statement.
The automaker sold 530,446 vehicles, down 19 percent on year, leaving revenue down 23 percent at 36.82 billion yuan, meeting analyst estimates.
To curb expenses, Geely reduced its workforce by about 12 percent during the first half to 38,000.
“Geely’s 1H20 earnings are largely in line with our expectation, thanks to its significant cost cut efforts, especially in wages and investments in fixed assets,” said Haitong International analyst Shi Ji.
However, the automaker knocked 6 percent from its full-year sales goal to 1.32 million vehicles — down 3 percent on year — just two weeks after maintaining a target set shortly before China’s virus lockdown in January.
Geely said headwinds are set to persist, making “2020 among the most difficult year in the group’s history.” It also warned “the intense market competition in China could worsen further.”
Geely has a market capitalization of about $21.2 billion, eclipsing international peers better known outside of China such as Fiat Chrysler Automobiles and Nissan Motor.
Its parent, Zhejiang Geely Holding Group Co Ltd., plans to merge the automaker with affiliate Volvo Cars and list the successor in Hong Kong and possibly Stockholm.
Merger talks were suspended in June, however, while the Hong Kong-listed automaker worked on listing shares on mainland China’s Nasdaq-like STAR board.
Geely plans to revamp factories at home and abroad using manufacturing platforms developed with Volvo Cars since 2013.
The automaker also aims to start European exports this year of the 01 SUV under its premium brand Lynk & CO.
Bloomberg contributed to this report