Toyota Indus Motor Company (IMC), which is one of the most popular car brands in the country has announced its financial results for Q1 2019-20.
The company posted a profit of Rs. 1.31 billion, down by 62.60% compared to a profit of Rs. 3.50 billion in the same period last year. IMC’s net profit has declined due to a decrease in sales volumes.
The company’s net sales turnover for Q1 2019-20 decreased by 41% to Rs. 20.7 billion as compared to Rs. 34.9 billion last year.
IMC’s combined sales of Complete Knocked Down Units (CKD) and Complete Built Units (CBU ) for the quarter has decreased by 56% to 6,839 units versus 15,560 units sold in the same period last year.
The market share of Indus Motor Company stood at 20% for the first quarter. The company produced 8,036 units of vehicles for the quarter, a decrease of 49.7% as compared to 15,977 units produced in the same period last year, stated the company.
A decline in sales volumes was observed in all segments, mainly on account of price impact due to additional customs duty and FED, while a rise in interest rates has reduced auto financing. Unfortunately, we couldn’t get the data for the various units of the company as PAMA’s website has been down for a couple of days.
Rupee’s devaluation played its part in bringing down the profits of the company with higher input taxes. Overall expenses of the company were reported at Rs. 772 million, up by 25.53% as compared to Rs. 615 million recorded in the previous year.
More importantly, customers’ fears of the government’s drive to increase the income tax net has also led the customers to not purchase cars.
The market conditions and the economic downtrend in the country have forced the company to observe approximately thirty (30) Non-Production Days (NPDs) to minimize costs. From October, Indus Motors has started to operate on a single-shift basis, which is expected to continue until improvement in market demand.
Earnings per share of the company for the quarter is Rs. 16.78 as compared to Rs. 44.63 reported last year. The board of directors also declared a first interim cash dividend of Rs. 7 per share for the quarter compared to Rs. 32.50 per share for the same period last year.
Ali Asghar Jamali, CEO Indus Motor Company commented on the results saying,
Despite the broader macro-economic challenges and higher inflationary environment, the company is managing the pressure by improving efficiency, and placing tighter controls on overheads.