China’s BYD takes big profit hit due to foundering solar sector
BYD Co, the Chinese car and battery maker backed by US billionaire Warren Buffett, said yesterday its net profit is expected to plunge by up to 95 percent year-on-year for the first quarter of 2012, dragged mainly by its solar power battery business, according to a report in the Global Times.
And the poor profitability may last into the second quarter of this year, Wang Chuanfu, president of BYD, told reporters in Hong Kong yesterday.
However, the Shenzhen- and Hong Kong-listed company expressed confidence over its 2012 car business, with Wang saying "a sales growth higher than an average 10 percent of the car sector can be expected."
"Since the second half of 2011, BYD has improved its product portfolio in sales, placing more emphasis on models priced over 100,000 yuan (USD15, 840) and with better profit margins," Li Yunfei, a BYD spokesman, told the Global Times.
The Shenzhen-based company reportedly has removed some 5,600 employees from its payroll over the past year, as indicated by staff figures disclosed in the company's 2010 and 2011 financial reports, something the spokesman refuted yesterday.
The company, which blamed "plunging prices of solar power products overseas last year" and "countervailing duties levied by the US" for the worse-than-expected performance of its solar power business, said it will strengthen investment in R&D of new models and speed up development of new energy business.