Toyota Indus Motor Company (IMC) has announced its financial results for the first quarter that ended September 30th, 2020 (FY21).
The company posted a profit of Rs. 1.84 billion in the first quarter, up by 40.50% as compared to a profit of Rs. 1.31 billion in the same period last year. Along with the result, the company also announced a cash dividend of Rs. 12 per share.
According to the company’s statement, the increase in turnover and profitability for the three-month period was mainly due to higher CKD and CBU volumes and increased other income due to improved cash flows, however, due to the depreciation of Pak Rupee and absorption of costs, the gross margin of the company reduced to 6.7% against 9.7% in the same period last year.
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Although quarter on quarter margins improved significantly, they still came in lower than the market expectations.
The net sales for the first quarter increased by 65% to Rs. 34.19 billion as compared to Rs. 20.71 billion recorded in the same period last year mainly due to a 74% increase in unit sales. According to a report by Topline Securities, the demand for the new cars returned strongly as the lockdown was lifted following the decline in COVID-19 cases and lower interest rates.
Similarly, the cost of sales of the company increased by 71% to Rs. 31.90 billion as compared to Rs. 18.70 billion.
The Company’s combined sales of Complete Knocked Down (CKD) and Complete Built-up (CBU) units for the quarter increased by 73% to 11,809 units against 6,839 units sold in the same period last year. The market share of IMC stood at approximately 27% for the first quarter.
The overwhelming response received for Toyota Yaris has also led to volume increase. The Company opened bookings for the Toyota Corolla 1.6 Manual Transmission, considering the customer demand.
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Toyota IMC recovered remarkably well following the easing of lockdown and is apparently continuing strong on a path of progress. As per the recent monthly sales report shared by Pakistan Automotive Manufacturer’s Association (PAMA) the automaker saw a YoY sales increase of 106% and a MoM sales increase of 32% in September 2020. A lot of which is due in large part to the impressive sales numbers of the new Toyota Yaris.
Based on their strong upward trajectory, the company also announced that it was reverting back to its double-shift production schedule to meet the rising demand. Furthermore, the company also has plans to ramp up its annual production from 66,000 units a year to 80,000 units a year.
A couple of months ago, Topline Research analyst, Hammad Akram, informed that management at Toyota IMC foresees the total market size of vehicle sales to increase up to 185,000 units during the financial year (FY) 2020-21. He also said that the sales figures might even go above that, given the current demand and IMC’s aim to introduce new vehicles in the current lineup, along with the increase in production.
Other income of the company saw an increase of 57% to Rs. 1.08 billion as compared with Rs. 695 million due to higher cash balance from increased order intake. Earnings per share of the company increased to Rs. 23.48 from Rs. 16.78.
INDU’s share at the bourse closed at Rs. 1,206.95, down by Rs. 39.21 or 3.15%, with a turnover of 77,300 shares on Wednesday.
In the Extra Ordinary General Meeting of Indus Motor Company Limited held on October 28, 2020, the existing Directors of the Company were re-elected as Directors and subsequently, in the Board of Directors meeting held on the same day, Mohamedali R. Habib and Yuji Takarada re-elected as Chairman and Vice-Chairman, respectively, and Ali Asghar Jamali re-appointed as Chief Executive, of the Company, for a term of three years commencing from October 31, 2020.
With additional input by Waleed Shah
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