MLADA BOLESLAV, Czech Republic - Czech carmaker Skoda Auto reported solid growth in 1999 profits and outlined plans for a new model to replace the aging Felicia.
Skoda said 1999 net profit climbed 18 percent to CZK2.6 billion ($71.8 million). Vice Chairman Detlef Wittig said Skoda's new Fabia supermini should help revenue growth accelerate by more than 23 percent in 2000.
Company officials said Skoda's two shareholders, Volkswagen Group and the Czech government, agreed to pay no dividend from 1999 net profit, electing to plow the earnings into long-term investment.
Investment over the next five years will total CZK75 billion, including development of another small family-car line to replace the six-year-old Felicia, said Wittig. 'Last year was a year of consolidation with a high orientation for the future,' he said.
Revenue in 1999 rose 4.4 percent to CZK110 billion, while worldwide unit sales rose 6 percent to 385,330 units. This was despite a recession in Skoda's home market, where sales fell 7.1 percent to 75,952 units.
Exports targeted mainly western Europe where Skoda sold 192,156 units, up 11.7 percent on 1998 levels. Germany was Skoda's biggest market in western Europe, with sales of 56,270 units - a year-on-year increase of 25.8 percent.
Skoda predicted global sales would rise 14 percent to 437,000 units in 2000. It expects to sell 180,000 Octavia sedans and wagons, 140,000 Fabias and 117,000 Felicias.
Skoda also said VW had confirmed it was still interested in buying the Czech government's remaining 30 percent stake in the company.
'Now it all depends on the government,' said Skoda Chairman and CEO Vratislav Kulhanek.
The Czech government agreed on April 3 to open official talks with VW. Finance Minister Pavel Mertlik said the talks would help determine whether the government wanted to complete the sale or hold onto its stake. Mertlik declined to comment on the sum the state could be seeking for its stake, but said he expected a final decision on the sale in June.
Last year VW offered CZK8 billion, but finance ministry officials said they were in no hurry to sell, claiming the market value was closer to CZK20 billion.
According to finance ministry spokesman Libor Vacek, the Czech government has asked an auditor to determine the exact value of its 30 percent stake in Skoda.
Reuters News Service contributed