May 30, 2012 (LBO) – Sri Lanka’s Diesel and Motor Engineering Company Plc, which has agencies for Mercedes Benz and Tata, said profits fell 36 percent to 427 million rupees in the March 2012 quarter. The firm reported earnings of 48.14 rupees for the quarter. The closed at 590 rupees up 18.70 Thursday. For the full year to March 2012, the firm reported earnings of 303.87 rupees per share on profits of 2.6 billion rupees up 27 percent from a year earlier.
Sri Lanka’s auto dealers made large profits last year following an import tax cut and low interest rates.
After bank credit was used to manipulate energy prices, and central bank credit was used to manipulate interest rates, Sri Lanka’s currency came under pressure and eventually fell from 110 to 130 rupees and interest rates also rose.
The state then also put up taxes on cars. Cars are a favourite target of rulers when the exchange rate falls from manipulating interest rates.
Sri Lanka’s Employees Provident Fund was the top shareholder of the firm with 13.44 percent.