China-based automobile retailer Lentuo International has reported profit of RMB64.3m ($9.95m) during the second quarter ended 30 June 2011, a decrease of 28.5%, compared to RMB90m ($14.16m) it reported for the corresponding period last year.

The company said that the decrease in gross profit was primarily because of lower vehicle sales and a drop in gross margin for automobile sales and maintenance services.

Revenue for the second quarter of 2011 was RMB653.8m ($101.1m), a decrease of 10.6%, compared to RMB731.6m ($114.35m) for the same period of 2010.

The company posted operating income of RMB35.4m ($5.5m) for the second quarter of 2011, compared to RMB68.3m ($10.67m) for the comparable period prior year.

Net income was RMB11.8m ($1.8m) for the second quarter of 2011, a decrease of 69.5% from RMB38.7m ($6.04m) for the same period in 2010.

The company expects that its revenues for the third quarter of 2011 will be approximately RMB740m ($115.6m) to RMB760m ($118.8m), representing a year-over-year decrease of approximately 21.8% to 19.6%.

Lentuo founder and chairman Hetong Guo said the company is pleased that it has met its quarterly guidance and have achieved sequential revenue growth in the second full quarter since Beijing's new traffic control measures were implemented.

"Our ability to rapidly adjust to the challenges posed by the policy change is a direct result of the operational expertise of our management team and the growing reputation of our brand," Guo said.

Source:automotive-business-review