Suzuki Posts a Huge Decline in Profits in 2018

Pak Suzuki Motor Company Limited’s (PSMC) profits have declined by 66.23% (Rs 1.29 billion), for the year that ended December 31st 2018 despite higher sales revenue as Rupee devaluation against the Greenback made a huge dent to the margins of the company.

The car manufacturing firm booked a profit of Rs. 3.82 billion in 2017.

The company’s revenues jumped 17.72% to Rs. 119.9 billion in 2018 from Rs. 101.8 billion in the previous year due to a 7% volumetric growth in sales and an increase in the average price of the products.

Full Year 2018-17  Volumes    
Models 2018 2017 Difference
Swift 5284 4245 24.48%
Cultus 21739 19404 12%
Wagon R 31146 24247 28.45%
Mehran 40828 42985 -5.02%
Bolan 19385 20116 -3.63%
Ravi 19621 19788 -0.84%
Motorcycles 23146 19845 16.63%
Total 161149 150630 7 %

Wagon-R remained the leader in the volumes followed by Swift and Cultus. Moreover, Mehran saw a decline in volumes and the company has also decided to stop producing the model which will be replaced by Alto. The company also made a huge investment in the upcoming Suzuki Alto 660cc as it imported machinery for the model.

Pak Suzuki’s cost of sales also increased by 22% to Rs. 112.8 billion. Gross profit of the company decreased by 27% to Rs. 7.04 billion from Rs. 9.65 billion in 2017.

Gross margins of the company were down as currency devaluation of 32% since December 2017 and higher commodity prices have dented the margins.

Administrative expenses of the company increased by 43.83% to Rs. 2.3 billion from Rs. 1.59 billion that further aggravated the profitability.

According to the experts, the company’s working capital has been at the lowest levels and for the first time, it has to go for bank financing. Profit from operations plunged 63% to Rs. 2.08 billion in 2018 against Rs. 5.63 billion in 2017.

Earnings per share (EPS) stood at Rs. 15.77 in 2018 compared with Rs. 46.49 in 2017.

The company also announced a cash dividend of Rs. 3.16 per share for the 2018.

The massive increase in finance costs also contributed in dragging down the company’s profitability as it surged from just Rs. 68 million in 2017 to Rs. 362.5 million in 2018.

At the time of filing this report, PSMC’s shares at the bourse were trading at Rs. 262, up by Rs. 4.04, with a turnover of 564,900 shares on Tuesday.

  • Buhat acha ha , aisa he hona chahiy in k sath , sab ko mil k boycott krna chahiy inke all vehicles ka
    Toyota ko again Cuore launch krni chahiy
    Aor Hyundai ko sentro

  • Just hogwash to affect policy changes by crying “hai mein lutt gai, barbaad ho gai!!!”. It should be ignored.

    Suzuki should reap what it has sown selling teen-dabba unsafe cars.

  • yes I want this crapy company to pack their bags and run away but facts arent supporting it, our nation is still not learning the lesson, the sales grew 7% which means people didnt stop buying the bought 7% more of the suzuki junk which explains that this awam is in mood for further beating by suzuki, what can I say I will keep depromoting these guys.

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