Pak Suzuki Reports its Biggest Loss in 10 Years

By Jehangir Nasir | Published Apr 23, 2019 | 8:00 pm
Suzuki Conditions $450 Million Investment with Tax Benefits | propakistani.pk

Pakistan Suzuki Motor Company (PSCL) announced its financial results for the first quarter of 2019, ending on 31st March, reporting a loss of Rs. 980 million. The car manufacturing firm booked a profit of Rs. 904 million in the same period last year.

This is the company’s largest loss in 10-years.

As an economic slowdown looms, Pakistan’s largest domestic auto company started the calendar year in the red. The company’s revenues jumped 9.3% to Rs. 34.44 billion in the quarter under view from Rs. 31.50 billion in the previous year, on the back of an increase in the average price of products, despite a drop in volumes by 4% YoY.

However, the cost of sales increased by 15.33% to Rs. 33.32 billion as compared with Rs. 28.89 billion in the same period of the last year which brought down the gross profit to Rs. 1.11 billion, down by a massive 57.50% as compared with Rs. 2.61 billion.

The decline in profitability was due to an increase in the cost of doing business amidst rupee devaluation; however, the impact was gradually passed on to the consumers, according to Topline Securities.

1st Quarter 2019                          Volumes
Models 1QCY19 1QCY18 Difference
Swift 1101 1452 -24.17%
Cultus 6281 6123   2.58%
Wagon R 8501 6630   28.22%
Mehran 9576 12583   -24%
Bolan 5398 5779   -6.60%
Ravi 5555 5503     0.94%
Total 36412 38070   -4.36%

 

A notable decline was witnessed in Mehran’s sales, which were down by 24% YoY. It is now being replaced by newly 660cc Alto. Moreover, motorcycle sales increased to 6009 units as compared to 5529 units in the same period last year.

There was a 5.5x surge in finance cost due to increase in debt borrowings and an increase in interest rates. Lower customer deposits forced the company to rely on borrowings to finance its working capital requirements, which resulted in a massive increase of 345.6% to Rs. 326 million in finance cost against Rs. 73.34 million in the same period the previous year.

Administrative cost increased to Rs. 626 million, while other income of the company decreased to Rs. 49.81 million from Rs. 176 million.

The unfavorable movement in the exchange rate and rising commodity prices with regulatory changes and increased competition from existing and new players can further dampen the company’s future outlook.

The company reported a loss per share of Rs. 11.92 from earnings per share of Rs. 10.99 as compared with the previous year. PSMC’s script at the bourse closed at Rs. 248.3, down by Rs. 12.57 or -4.82% with a turnover of 751,100 shares on Tuesday.

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Jehangir Nasir

  • Very Nice, Allah Loss mai Barkat dalyee
    30 yrs old models sold at exorbitant price and now they cry over loss
    Funny

  • ALLAH or barkat dalay in kay loss may
    Mehran teen dabba ha or ya 8 lakh may sale karay rahain hain or now weeping??

  • hahahahahahahaha Pakistan ki awam ko loot lya Suzuki walo tm nay or tm kehty ho tumhara nuksan ho gyea Ghatiya logo itni mehngi cars wo b thakard quality ki awam ko loot rahay ho tm log Pakistan ki awam ko India main Car ka ratdm intahi sasta or Cars b khobsurat or Behtreen Or Pakistan Main Ghatia tareen Quality or Car b mehngi Suzuki Vetara wahan Launch ki khobsurat or behtreen or yahan py bekar cultus Or altoo 660cc Pakistan ki awam ko loot rahay ho tm suzuki walay

  • Why Japan got dual standards?Why didn’t they check the quality made in other countries. I will never buy suzuki whole of my life.its so disgusting and cheap quality.they must be shut down permanently .

    • This is same happening to Honda and Toyota in Pakistan. I ll never buy any of these local manufactured car. Don’t know why these companies not maintaining their standard.

  • It is interesting to see that every single comment here complains about Suzuki’s quality and monopoly. Hey Suzuki! It is about time you remove your head buried in sand and acknowledge that you have got competition now.

  • Suzuki deserve that it is absolutely right with them.They are part of the big 3 monopoly….Suzuki Alto for Rs.10 Lakhs.Give me a break.The prices of cars are insane in Pakistan.

  • Is Ko Kehte hai SUZUKI Khud Corruption Kar K Apni Profit Chupa Rahi hai :
    NAB K Hawale Kiya Jaye SUZUKi Ko WARNA Jila Watan Kar DIYA Jaye

  • So happy, selling crap last 10 years. Swift has been redesigned Three times in last 10 years with vvt engines but we continue to get baleno engines in 10 year old shape..

  • Its the price of their cars that is effecting the busines of suzuki no one one can afford to buy a local make at such prices ..

  • Thats good, they are selling crap to the people of Pakistan with th help of bureaucrats by imposing ban and very high taxes on import of vehicles.

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