Dongfeng’s profit drops on quake woes

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From Bloomber:

Dongfeng Motor Group Co., the Chinese partner of Nissan Motor Co. and Honda Motor Co., posted a 10 percent decline in first-half profit as slowing demand and production disruptions after Japan’s earthquake hurt sales.

Net income in the first six months fell to 5.9 billion yuan ($925 million), or 0.68 yuan per share, from 6.53 billion yuan, or 0.76 yuan, a year earlier, the company said in a filing to the Hong Kong stock exchange today. That beat the 5.5 billion yuan average of four analysts’ estimates compiled by Bloomberg.

The automaker faced output disruptions after Japan’s March 11 earthquake and tsunami caused shortages of electricity and parts at Nissan and Honda. Shipments have also slowed in China this year after the government reinstated a 10 percent sales tax on small cars and phased out trade-in subsidies in rural areas.

First-half sales at the Wuhan, Hubei province-based Dongfeng rose 3 percent to 63.7 billion yuan. The country sold 9.3 million automobiles in the first six months, up 3.4 percent from a year earlier, according to the China Association of Automobile Manufacturers.

Dongfeng rose 5.8 percent to HK$12.72 at the 4 p.m. close in Hong Kong trading, before the announcement. The stock has declined 5.1 percent this year compared with a 12 percent drop in the benchmark Hang Seng Index.