BYD 2012 net profit down 94 pct

Shenzhen-based carmaker and battery producer BYD Co, backed by US billionaire Warren Buffett, reported Monday a slump in net profit for 2012 compared with a year earlier, but it predicted a turnaround in the first quarter of 2013.

BYD earned 46.8 billion yuan ($7.5 billion) in revenue in 2012, down 4 percent year-on-year, and its net profit dropped 94.1 percent to 81 million yuan for the same period, the company said in its annual report.

Following the release, BYD's Shenzhen-listed shares closed up 0.5 percent and its Hong Kong-listed shares closed down 0.8 percent Monday.

BYD's revenue from the auto business grew slowly due to the sluggish domestic economy and a slowdown in China's auto demand, the company said. Its revenue from car sales increased 3.11 percent year-on-year to 24.6 billion yuan.

A decline in the mobile phone assembly sector and a loss-making solar energy business further weakened its performance, BYD said.

It is the third consecutive year for BYD to record a decline in results, after net profit slides of 45.1 percent year-on-year in 2011 and 33.5 percent in 2010.

But BYD predicted that its net profit for the first quarter of 2013 will increase more than 50 percent year-on-year, owing to rising auto sales and reducing losses in the solar business.

The declining profits over the past few years are causing BYD to shift its strategic focus from electric cars to traditional cars, Feng Shiming, an auto analyst with Shanghai-based Menutor Consulting, told the Global Times Monday.

BYD had bet on new energy, believing that its electric cars could succeed because of favorable government policies and subsidies, but the firm was too optimistic, Feng said.

BYD's performance has improved noticeably since the third quarter of 2012, thanks to its launch of more traditional auto models such as the BYD F3 Surui, Zeng Zhiling, director of LMC Automotive Asia Pacific Forecasting, said Monday.