Vehicle sales propel Dimo’s 2014/15 performance

"Rs. 2.5 bn. workshop and showroom facility among best in Asia"


Diesel and Motor Engineering PLC which celebrated its 75th Anniversary, during the year ended Mar. 31, 2015, has posted revenue of Rs. 28 billion and a profit after tax of Rs. 596 million, successfully achieving its planned profit before tax which was a substantial increase from the previous year.

"We expect this growth momentum to continue into 2015/16," the company said in its recently released annual report.

The company which was founded in 1939, and incorporated in 1945 has long held the Mercedes Benz agency and have in more recent years branched into Tata and Mahindra and Mahindra ranges.

The company’s chairman, Mr. A R Pandithage, said that external factors such as a stable US dollar, had remained helpful during the year. Relatively low interest rates, increasing total industry volume of commercial vehicle sales, and the commencement of construction related projects (DIMO is a supplier of construction equipment) and many other factors had fostered a conducive environment for business.

Dimo has invested Rs. 2.5 billion, including the land purchase price, in its Dimo 800 facility in Colombo. This facility with 24,748 square metres built area houses the Mercedes Benz Centre of Excellence which became fully operational during the year under review.

"The facility consisting of 16 car showrooms, and a 85-bay state of the art workshop is recognized by Daimler AG as one of the best facilities in Asia," Pandithage said.

He said they had established a branch in Jaffna in 2009, to serve the Northern Province. It is supported by their customer contact points in Vavuniya and Mannar.

Saying they had made significant investments in the recent past in their vehicle related segments, Pandithage was confident that this will provide the competitive edge to seize opportunities arising in these segments in the medium to long-term.

The company’s Director/CEO A G Pandithage said the number of vehicles sold during the year had increased by 176% from the previous year and this segment stands to gain from the gradual increase of the country’s per capita income.

"The Tata passenger vehicle sales grew by a staggering 228% after reposition of the products offered," he said. "This year we sold ten per cent more Tata commercial vehicles, the main contributor to group turnover. The last six months in particular generated 76% of units sold for the year; we expect this momentum to continue well into 2015/16."

The Tata commercial vehicle business has been earmarked for further investment given its potential for future growth, he said.

Pandithage also said that the turnover of their marketing and distribution segment grew to an impressive Rs. 3.35 billion from Rs. 2.65 billion the previous year with the growth driven by their tyre business where turnover increased by 24%. They had embarked on retailing tyres under the brand ‘Dimo Tyre Mart’ which was part of their medium and long-term strategy for the business.

Plans for the forthcoming year include the better utilization of workshop capacity with results expected to flow in from the expansion of the spare parts distribution business during the previous year. Consequently, an improved performance is also forecast for the vehicle after sales segment.

"The state infrastructure development programs are expected to pick up during the second half of the year which should have a positive impact on demand for our construction and material handling equipment and after service segment," Pandithage said. "The marketing and distribution and the electromechanical, bio-medical and marine engineering segments are also expected to produce an improved performance."

Dimo has a stated capital of Rs. 425.29 million, other equity components of Rs. 2.84 billion and revenue reserves of Rs. 6 billion in its books. Total assets of the group stood at Rs. 18.07 billion and total liabilities at Rs. 8.83 billion.

Earnings per share at Rs. 67.15 for the group and Rs. 61.57 for the company were up from Rs. 44.34 and Rs. 31.54 respectively for the previous year.

The Employees Provident Fund is the top shareholder of Dimo with 18.59 % of the company, up from 13.84% the previous year. The directors comprising the Pandithage and Algama families are also major shareholders with the top 20 shareholders on the register owning 81.18 % of the company.

Mr. A R Pandithage owns 11.17%, Mrs. J C Pandithage (10.64%), A&G investments (6.86%), Mr. C Algama ( 6.40%) and Mr. A G Pandithage ( 5.92%).

The Dimo share closed at Rs. 630 on March 31, 2015, trading between Rs. 485 and Rs. 730. It closed at Rs. 505 the previous year trading between Rs. 450 and Rs. 649.

The directors of the company are Messrs A R Pandithage, (Chairman / MD) A G Pandithage (CEO), AN Algama, S C Algama, Dr. H Cabraal, B C S A P Gooneratne, Prof. U P Liyanage, A M Pandithage, R Seevaratnam and R C Weerawardena.

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