Ghandhara Nissan has announced its financial results for the nine months ending March 31st, 2019.
The truck maker incurred a consolidated loss of Rs. 269.60 million for the period as compared with a profit of Rs. 323.97 million last year. Overall, the sales of the company declined by 56.31% to Rs. 2.18 billion as compared with Rs. 4.99 billion recorded in the same period last year.
However, the cost of sales were down by 54% to Rs. 1.99 billion as compared to Rs. 4.31 billion. This took the gross profit to decline by 72% to Rs. 192.53 million from Rs. 685.46 million in the nine-month period.
The main reason of loss during the period was a significant drop in sales and contract assembly volumes. This has resulted in under-absorption of factory overheads due to which gross profit has declined substantially. Moreover, the decline in gross profit is also attributable to increase in deprecation charge during current period owing to revaluation during FY 2019.
Other income of the company was down by 47% to Rs. 44.29 million as compared with Rs. 83.43 million. The finance cost of the company jumped Rs. 110.60 million from Rs. 109.88 million last year. It also reported a share of loss from an associate of Rs. 83.97 million as compared with a profit of an associate of Rs. 90.51 million.
GHNL reported a loss per share of Rs. 4.73 as compared with EPS of Rs. 5.68.
During the period, Ghandhara Nissan had decided to put Datsun Go Car project on hold. In the recent progress report, it was noted that NML’s recent business strategy and particularly the management policy change with respect to the Datsun segment, it is critical to note that Indonesia, which is the mother plant for Datsun CKD kits, may not be a sustainable KD source.
“The company still awaits Nissan’s assurance/confirmation on the continued and smooth supply of Datsun parts, yet it is high time to put the ongoing project activities on-hold before getting a clear roadmap from NML,” added the report.
The company stated that, “Keeping the above situation in view, till Nissan takes a final decision on this project, GNL will have to wait for a final verdict on the viability of the project.”