GM Daewoo Swings To 2008 Net Loss On Low Demand,Invest Losses
07 April 2009 - 8:36AM
Dow Jones News
GM Daewoo Auto & Technology Co., the South Korean unit of
General Motors Corp. (GM), Tuesday posted a net loss in 2008 due to
low demand and investment losses.
GM Daewoo's Vice President Jay Cooney said by phone that high
oil prices last year led to reduced sales of SUVs, while rising
manufacturing costs and volatile foreign exchange rates took their
toll on profits.
GM Daewoo shifted to a net loss of KRW875.69 billion ($663
million) last year from a net profit of KRW540.51 billion a year
earlier, the company said in a regulatory filing.
Losses from derivative investments jumped to KRW2.33 trillion
last year from KRW206.45 billion a year earlier, said the
filing.
Before last year, the carmaker had achieved three straight years
of full-year net profit from 2005-2007.
Full-year operating profit plunged 39% to KRW290.31 billion in
2008 from KRW472.27 billion a year earlier, while sales were down
1.6% to KRW12.310 trillion from KRW12.514 trillion.
GM Daewoo, which said it may suffer liquidity problems in the
second quarter, is in talks with the Korean government on a daily
basis to secure short-term financial support.
Its exports plunged by 45% on year to 116,913 units in the first
quarter and domestic sales fell 34% to 18,576 units.
GM and GM's affiliated companies own a 72% stake in GM Daewoo,
while Korea Development Bank has the remaining 28%.
-By Kyong-Ae Choi, Dow Jones Newswires; 822-2198-2236;
kyong-ae.choi@dowjones.com