Toyota Posts a 6% Decline in Profits Despite Higher Corolla Sales

The maker of Toyota Corolla, Indus Motors, has announced its financial results for the half year ended December 31st, 2018 (1HY19).

The company reported a 6.11% decline in its profitability, which came down to Rs. 6.91 billion against Rs. 7.36 billion in the same period last year.

However, it reported a 21.20% increase in its net sales to Rs. 76.44 billion, as compared with Rs. 63.07 billion in the corresponding period last year with the cost increasing 27.20% to Rs. 66.38 billion from Rs. 52.18 billion.

The growth in sales was due to higher volumetric sales coupled with price hikes during the half year. Similarly, gross margins shrank on the back of rupee devaluation and a lower proportion of high-margin variants.

Indus Motors sold 32,631 units during the half year, up 8.3% as compared with 30,134 units.

Breaking down the volumes, Corolla again took the lead in the sales as 27,950 units were sold, up by 10.40% during the half year 2018 as compared with 25,325 units in 2017.

However, Toyota’s Fortuner saw a decline in 23.5% in sales during the period. The company sold over 1,253 units against 1,638 in the same period last year.

Moreover, Hilux sales showed a growth of 8.1%. During the first half of the fiscal year, Toyota sold 3428 units of Hilux as compared with 3171 units in the same period last year.

During the half year, the distribution expenses grew by 14%, however admin expenses fell by 12.68%. Other income of the company was stated at Rs. 2.09 billion, which is up by 18.55% as compared with Rs. 1.76 billion due to the rising interest rates through investments.

Earnings per share of the company were stated at Rs. 87.94 as compared with Rs. 93.69 during the half year. The company also announced an interim cash dividend of Rs. 25.00/share, which is in addition to a cash dividend already paid at Rs. 32.5 in 1QFY19.

At the time of filing this report, INDU’s shares at the bourse were trading at Rs. 1,298.02, up by Rs0.85 or +0.07%, with a turnover of 17,400 shares on Monday.