Geely Auto logs 5% year-on-year decline in 2020 revenue

Shanghai (Gasgoo)- Geely Automobile Holding Ltd., (Geely Auto or the group), the Hong Kong-listed entity of Geely Auto Group, announced on Tuesday its full-year revenue in 2020 reached 92.114 billion yuan ($14.152 billion), dropping 5% over the previous year. The annual net profit attributable to shareholders fell 32% year on year to roughly 5.534 billion yuan ($850 million).

The group said the financial performance in 2020 was below the management's expectation due to the prolonged negative impact on profitability caused by the dramatic disruption to sales activities as result of the national lockdown starting in Jan. 2020.

Photo credit: Geely Auto

To recover the company's financial strength and prepare for a possible drawn-out disruption to production and sales, Geely Auto claimed in May 2020 the placement of 600 million new shares to institutional investors in a bid to raise HK$6.48 billion ($834.326 million). With the help of the proceeds from the share placement, the group's total cash level (referring to pledged bank deposits and bank balances & cash) was maintained at 19 billion yuan ($2.917 billion) by the end of 2020.

Despite the impact of coronavirus pandemic, Geely Auto continued to lift its market share and further strengthen its leadership as China’s largest private car maker. In 2020, the group sold 1,320,217 new vehicles in total (including the sales of Lynk & Co-branded vehicles), a year-on-year decrease of 3%. The annual domestic wholesale volume declined 4% over the previous year to 1,247,526 units. On the other hand, its export volume vigorously jumped 25% from the year-ago period to 72,691 units thanks to the introductions of more updated models into overseas markets.

Geely Auto recorded a total expense of 3.738 billion yuan ($573.947 million) related to research and development (R&D) activities, an increase of 22% from a year ago. “As most of the ongoing research and development projects are for new technologies not yet used in existing products, a large proportion of the relevant expenditures were capitalised, and only amortised to expenses after the products using the technologies were offered to the market”, Geely Auto said in its financial results.