Geely beats forecasts as Volvo pays dividends

SHANGHAI - Geely Automobile Holdings Ltd reported on Wednesday that first-half profits have more than doubled.

The Chinese company saw its fastest earnings growth in eight years, as cars designed with its Swedish unit Volvo won over domestic consumers.

Although known at one point for its sparse designs, the Hangzhou-based manufacturer now has up-market aspirations.

Vehicles engineered with Volvo know-how, such as the GC9 sedan and the Boyue sport-utility vehicle, have been hot-sellers in China, the world's biggest leading market.

"So far in 2017, the group's performance has exceeded management's original expectations, despite a generally weaker market in China during the same period," the company said in a statement to the Hong Kong bourse.

Net profits came in at 4.34 billion yuan ($648.96 million), which was 128 percent higher than the 1.91 billion yuan it made in the same six-month period a year earlier.

It also eclipsed an estimate of 3.61 billion yuan from CCB International, which specializes in initial public offerings, or IPOs, in Hong Kong.

Sales jumped 89 percent between the January to July period and last month Geely raised its 2017 target by 10 percent to 1.1 million vehicles. Last year, it sold 766,000 vehicles.

Geely's parent company, Zhejiang Geely Holding Group, owns the maker of London's black cabs and this year acquired a 49.9 percent stake in Malaysian automaker Proton.

The carmaker said the business environment in its previous key export markets in Eastern Europe and the Middle East remained weak, and that it would continue to operate its exports business for the rest of the year.

In its next phase of expansion, Geely plans to market a third brand, Lynk & Co, in developed markets, beginning with Europe and the United States in 2017.

In addition, the company plans to use more Volvo-developed technologies, including small turbo-charged gasoline engines in Geely-brand cars.

Reuters