Friday, February 21, 2014
By John Andrew
Ssangyong on the path of recovery
The turnaround towards profitability at Mahindra & Mahindra's Korean subsidiary Ssangyong Motor Company is now within reach. The Korean SUV maker on Thursday announced a record revenue growth for the year 2013 ofRs 20,200 crore and a marginal loss of Rs 13.93 crore. M&M-owned South Korean SUV maker, Ssangyong Motor Company is inching towards break-even as consistent growth in volumes has helped the company post a record 21.3% growth in revenues for 2013 at Rs 20,203 crore or 3.4 trillion won.The company posted a marginal net loss of Rs 13.93 crore or 2.4 billion South Korean won, while the operational loss has come down by a tenth at Rs 51.66 crore versus Rs 569.46 crore of operational loss or 98.1 billion South Korean won registered in 2012.
Having recorded operating profit during two quarters in 2013, the company was expected to post an annual operating profit, but the rapid drop in the foreign exchange rate as well as the Supreme Court decision on the ordinary wage issue in the fourth quarter, negatively affected the company's financials resulting in an 8.9 billion won of annual operating loss. The company said this performance was achieved based on stable labour-management relations and the successful launch of new products that helped restore customer confidence. This is the strongest sales performance of the company in a decade and this is despite the difficult business environment.
Reflecting on the 2013 earnings, Lee Yoo-il, CEO of Ssangyong Motor said , "Last year, the company achieved meaningful results despite the difficult external business environment in terms of sales and revenue growth and loss reduction," adding, "this year as well, we will address and overcome its challenges to continue to firmly build the foundation for a turnaround." The sales growth at Ssangyong which enabled the company overtake Renault Samsung as the fourth largest passenger vehicle maker in South Korea in 2013 has seen its operating losses reduce significantly in the last three years, thereby making the financial structure of the company stronger than before. In the domestic market, sales of models like the Korando Turismo increased, which helped the company grow volumes by 34.1% compared to 2012.
Source: Economic Times