Embattled Korean car manufacturer has posted a R136-million operational profit for the three months to June, raising hopes of a financial turnaround by the end of the year.
Daewoo on Wednesday posted a $17-million (R136-million) operational profit for the three months to June, raising hopes that the bankrupt South Korean manufacturer may turn a net profit this year.
The company, which is the subject of protracted takeover talks with General Motors, recorded an operating profit of $1,3 million (R10,4 million) in June, its third straight month in the black.
Its overall operational profit in the second quarter stood at $17 million (R136 million), a reversal from a $32,5 million (R260 million) loss in the previous quarter.
Sales increased to $1 billion (R8 billion) in the second quarter, up from $795 million (R6,4 billion) in the previous quarter.
After shedding one third of its workforce and other cost-cutting measures, the company turned its first profit since June 1998 in April, recording $5 billion (R40 billion) in operating profits.
The next month the figure doubled to $10,2 billion (R40,8 billion).
“The revenue and profit base worsened in June due to a decrease in high-margin knocked-down exports to East Europe,” a Daewoo spokesman said.
Daewoo managers said they hoped the company would end the year with an operating profit as sales are expected to improve in the second half following the extension of its warranty to three years from two years.
The improving performance could help the South Korean financial authorities in their talks with General Motors, they said.
The government and General Motors have refused to discuss the negotiations, only confirming that talks are continuing. But the US car manufacturing giant is believed to be interested in only selected parts of the Daewoo Motor operation.
General Motors has reportedly offered $769 million (R6,1 billion) for the South Korean firm, far lower than the price sought by Daewoo Motor’s creditor banks.
