By Jehangir Nasir & Waleed Shah
Toyota Indus Motor Company (IMC) has announced its financial results for fiscal year 2019-20 that ended on June 30, 2020.
Lower sales and the ongoing effects of the COVID-19 pandemic during the last quarter of the FY20 drove the company’s profits down to Rs. 5.08 billion, declining by a massive 63% as compared with Rs. 13.71 billion in the corresponding period of last year.
The company also announced a final cash dividend of Rs. 7 per share which takes the total payout in FY20 to Rs. 23 per share.
This decline in earnings was primarily due to the lower sales amid the lockdown initiated in H2 FY20. The marked decline in sales and profit for IMC was also a result of the devaluation of the Pakistani Rupee against the US Dollar.
The company’s net sales turnover for the year decreased by 45.50% to Rs. 86.16 billion as compared to Rs. 157.99 billion recorded last year. However, the cost of sales of the company decreased by 43.30% to Rs. 78.71 billion as compared to Rs. 138.80 billion due to lower production and fewer working days.
Due to the coronavirus pandemic, a majority of the local auto companies stopped their operations to comply with the lockdown orders. During May, the Indus Motor Company had announced to resume their operations. The company had 55-60 non-production days during the last quarter of FY20.
The auto sector could not revive in the last quarter of FY 19-20 as per PAMA data due to the delayed resumption. April and May 2020 were the hardest hit months, with April 2020 recording zero sales in the passenger car segment across the industry.
During the year, the sales volume of the company was down by 56.61% to just 28,378 units as compared with 65,399 units sold last in FY19. Overall the combined sales of Toyota CKD and CBU vehicles stood at 28,837 units, compared to 66,211 units in the previous year.
The company discontinued the Corolla 1.3L vehicles in March 2020 which performed as market leaders in the segment for over 25 years. However, the flagship Corolla brand will continue in 1.6L and 1.8L segments as available worldwide.
IMC officially introduced Toyota Yaris with variants in 1.3L and 1.5L segments in the Pakistani market in March 2020 and sold 1,327 units during May and June.
| Â FY19-20 (Jul-June) (Volumes) | Â | ||
| Models | FY 2019-20 | FY 2018-19 | Difference |
| Toyota Corolla | 22,140 | 56,720 | Â -61% |
| Toyota Fortuner | 1,163 | 2,609 | Â -55.42% |
| Toyota Yaris | 1,327 | – | – |
| Toyota Hilux | 3,748 | 6,070 | Â -38.25% |
| Total | 28,378 | 65,399 | Â -56.61% |
Other income of the company was down to Rs. 3.20 billion, showing a decrease of 25.58% as compared with Rs. 4.30 billion during the previous year due to a drop in new car bookings during the period. Distribution expenses were reported at Rs. 1.46 billion as compared to Rs. 1.41 billion and administrative expenses decreased to Rs. 1.38 billion as compared to Rs. 1.41 billion.
Ali Asghar Jamali, CEO IMC in a released statement said,
IMC has, and always will be devoted to Pakistani market and to our customers whose interest and belief in our products is rapidly increasing every year. It is because of the support of our customers and their trust in us that IMC is working diligently to provide them with the best even during the times of global pandemic that has caused an overall economic slowdown.
Earnings per share of the company decreased from Rs. 174.99 to Rs. 64.66 during the period. INDU’s shares at the bourse closed at Rs. 1386.80, up by Rs. 24.17 or 1.76%, with a turnover of 24,100 shares on Monday.
During the year, the company contributed a sum of Rs. 35.9 billion to the national exchequer.
The past year hasn’t been too kind to Toyota IMC, with the company having to bear through a 61% sales decrease for their flagship vehicle, i.e. the Toyota Corolla. A large part of this decline can be attributed to the Coronavirus, but the decline had, in fact, begun much before that.
Between Financial Year (FY) 2018-19 and FY 2019-2020, Toyota IMC bumped up the prices of the Corolla four times, which resulted in a 15% increase in the car’s price on average.
With frequent inflation of prices, the demand for new cars is on a continuous decline. More people are opting for 2nd hand vehicles rather than new ones because they can get the same features for a better value.
This brings us to the conclusion that the cars being offered by local automakers provide lower value for money. Hopefully, automakers will realize this one day and come up with a better marketing and pricing strategy, not only to benefit the buyers but themselves as well.
Today’s reality cars are technology symbols. They fade rapidly with newer Digitals which protects the vehicle from Accidents, based on the Sensor technology, the Euro4,5 fuel may bring severe Climate Change to Karachi. Warnings of WHO, Climate Change is diesel, Euro 4,5 grades will equally contribute Climate Change factor in Pakistan. Only Hybrid Solar/PV may avoid Climate Change. The cars should run on Solar with Airconditioning if we want to Avoid Climate Change in Karachi in 2010. The Mobility/transport are Train, commuter, Solar Buses, No Rickshaws, No ChinQue, No Car, new or old. Just walk.
What do you smoke man? “the Euro4,5 fuel may bring severe Climate Change to Karachi. Warnings of WHO, Climate Change is diesel, Euro 4,5 grades will equally contribute Climate Change factor in Pakistan”?? The prevalent fuel is better you reckon?
The Indus Motor Company (IMC) should shut down already. Have been selling Pakistanis the utter crap for last 3 decades.