Toyota IMC Records a 13.6% Increase in Profits

Indus Motor Company (INDU) – the makers of Toyota in Pakistan – posted a net profit of Rs 11.63 billion for the nine months that ended on March 31, 2018 – up by 13.57% compared to Rs 10.24 billion in the same period last year.

Earnings per share (EPS) jumped to Rs 148.04 when compared with an EPS of Rs 130.34 in the same period last year.

The company announced an interim dividend for the quarter at Rs 32.5 per share (325%). This is in addition to first interim cash dividend already paid at Rs 62.50 per share – first interim cash dividend was at 300% and the second interim cash dividend was paid at 325%.


Car Sales Grow Despite Increase in Prices

The earnings are in line with the market expectations.

Company’s sales increased by 19% year-on-year to Rs 100.18 billion during the nine months that ended on March 31, 2018.

Units Units
Models 9M’18(9MonthsEnded March 31, 2018) 9M’17 (9 Months Ended March 31, 2017) Difference
Toyota Corolla 38,244 40,694 -6.02%
Toyota Fortuner 2,741 811 238%
Toyota Hilux 5,442 4,239 28.38%
Total Sales (Units) 46,427 45,744 1.49%


A shift in product mix in favor of high-value products led the growth in earnings. In this regard, Fortuner posted a volumetric growth of 238 followed by 28.38% YoY increase in Hilux/Vigo for 9MFY18.

Due to higher than anticipated sales of Toyota Fortuner and Hilux, revenues witnessed strong growth.

Overall, the volumes increased by a mere 1.49% for the nine-month period. The administrative expenses increased to Rs 1.07 billion, up by 50% YoY.

Gross margin for the nine months saw an increase of just 15.19% to Rs 15.57 billion. However, gross level margins clocked in at 17.5% in 9MFY18 as compared to 18.0% in 9MFY17.

This takes the 3rd quarter (ending March 2018) earnings Rs 4.27 billion, up by 2.64% (EPS Rs 54.35) compared to Rs 4.16 billion (EPS Rs 53.05) in the same period last year.

Sales revenue in Q3FY18 showed a growth of 12% YoY on the back of higher average selling prices, despite dispatches falling by 945 units YoY despite 5% decrease in volumes.

This can be attributed to a rise in high margin products in the sales mix (21% vs.13% in Q3FY17) and multiple price increases. However, gross margins dropped to 17.5% due to rise in commodity prices and 9% PKR devaluation against US$, which kept the bottom-line largely flattish.

Indus Motor Company was the first company that increased the prices of some of its variants by Rs 50,000-60,000 in January 2018. The prices were increased again in March as well.

The auto industry is particularly sensitive to rupee depreciation because of its high dependence on imported raw-material and parts that become expensive with the fall in currency’s value.

INDU’s share at the PSX closed at Rs 1899.99, up by Rs 27.98 with a turnover of 107,100 shares in the first session.

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