FMI’s automobile production sector continues to return solid profits.

FIRST Myanmar Investment (FMI) company last week announced that it is increasing investment in automobile production and moving away from producing concrete.

The company held its 17th annual general meeting on November 17 and FMI chairman U Theim Wai announced that the company had divested itself of its two concrete production stakes and had bought a further 40pc share in one automobile production firm.

“In 2009, we disposed our 15pc of investment in Chinthe Concrete in a management-buy-out scheme worth K85.5 million because we concluded that it is unlikely for this entity to contribute any significant income return in future.

“And we sold our 19.5pc investment in Mandalay Cement Industries Company Limited [MCICL] for K1.737 billion because that company is moving to a new location in Kyaukse and was looking for fresh capital to boost production capacity.

“We considered, from our point of view, that this was not a good time to put in fresh capital and wanted to move away from that industry, which earned less than 1pc of our net income,” he said.

He said profits for the 2009 fiscal year were about K1.112 billion, or about US$1.2 million at current exchange rates, with the company’s automobile production sector the strongest performer.

U Theim Wai said the automobile division earned K620 million this year and FMI bought an additional 40pc share in Yoma Yarzar Manufacturing, bringing the total share to 90pc.

“Our automobile division includes four companies – SPA Motors and Motorcycles, Yoma Yarzar Manufacturing, Myanmar Suzuki Motor Company and Myanmar Nissan Company. This sector made the highest net income and contributed 56pc of our revenues, increasing from K445 million last year to K620 million this year,” he said, adding that the sale of MCICL funded the purchase of the additional 40pc share in Yoma Yarzar.

He added that that company had performed very well within the past two years of operation and had sold more than 6000 motorcycles via its Stream brand.

U Theim Wai said FMI had not remained unscathed by the global financial crisis, with net profits dropping by 1pc compared with those recorded in the 2007-08 fiscal year.

“Last year we were able to pay out a dividend of K150 per share to our shareholders and but this year that dropped to K100 because our net income dropped from K810 million last year to K799 million this year,” he said.

He added that the company’s income from its real estate holdings dropped to K385 million from K420 million a year earlier, with FMI’s services industry still posting losses.