Pak Suzuki Motor Company Limited, which is the largest player in Pakistan’s automobile industry, has announced its half-year financial results for the period ended June 30th, 2019.
The company reported a loss of Rs. 1.5 billion during the half-year. The car manufacturing firm booked a profit of Rs. 1.29 billion in the same period last year.
However, net sales during the half-year were recorded at Rs. 65.42 billion, which were up by 4.86% as compared with Rs. 62.39 billion, on the back of double-digit percentage increase in the average price of products, despite volumes dropping by 11.26%.
The cost of sales increased by 10.32% to Rs. 64.05 billion as compared with Rs. 58.06 billion which took the gross profit down by 68.58% to Rs. 1.37 billion compared to Rs. 4.36 billion on the back of consistent Rupee devaluation against the US dollar.
| 1st Half-year CY 2019-2020 Volumes | Â | ||
| Models | HYCY19-20 | HYCY18-19 | Difference |
| Swift | 2116 | 2775 | -23.75% |
| Cultus | 12006 | 10982 | Â 9.32% |
| Wagon R | 16533 | 15065 | Â 9.74% |
| Mehran | 15155 | 24002 | Â -36.86% |
| Bolan | 9497 | 11254 | Â -15.61% |
| Alto | 1685 | – | – |
| Ravi | 9428 | 10768 | Â Â Â -12.44% |
| Total | 66420 | 74846 | Â -11.26% |
During the half-year period, the company saw a 11.26% decrease in its sales volume. Mehran has been discontinued by Suzuki and it has been replaced by Alto, for which the company sold almost 1685 units during the period. Swift’s sales were also down by 23.75%, however, Cultus and Wagon R remained in the positive zone as their sales were up by 9.32% and 9.74% during the half-year.
Gross profit margins settled at 2% in H1 FY19 compared to 7% in the same period last year. The decline is due to higher raw material costs owing to currency devaluation.
The finance cost of the company has increased to Rs. 706.42 million against Rs. 92.86 million due to an increase in interest rates. Suzuki’s other income fell down to just Rs. 97 million.
A tax reversal of Rs. 600 million remained on the positive side of the company.
It reported a loss per share of Rs. 18.53 as compared to earnings per share of Rs. 15.77.
2nd Quarter Result
Analyst Suman Rohra at FlatRock associates said that Pak Suzuki, during Q2 2019 reported a loss after tax of Rs. 544.61 million translating into LPS of Rs. 6.62/share, down by 238%/YoY compared to the same period a year ago as compared with a profit of Rs. 393 million.
The sales of the company plunged by 10%/QoQ to clock in at Rs. 31.03 billion owing to lower volumetric sales and multiple price hikes due to the swift devaluation of Rupee against the greenback.
PSMC’s sales witnessed a steep fall of 16% QoQ to clock in at 30,433 units in Q2 2019.
The overall loss may be lower than the previous quarter but bear in mind that the company’s loss before tax clocked in at Rs. 1.59 billion. A massive tax reversal of Rs. 1.05 billion was the savior for the company during the quarter.
PSMC’s script at the bourse was closed at Rs. 184.01, down by Rs. 7.31 or -3.82% with a turnover of 110,000 shares on Wednesday.
Soda can are safer than junk pakistanis are forced to buy for last 40 years with manipulated prices in manipulated market without competition when developing world is moving on to million different better quality products and manufacturers with cheaper prices.
I am surprised to see that they still manage to sale 15155 Mahrans :(
shit Pakistani buyer’s mentality. Cars companies are doing very good with us.
Company with ugliest looking cars in the world is doing record business in Pakistan while the real players are kept behind.