Toyota Indus Motor Company (IMC) has announced its financial results for the year ended June 30th, 2022.
The Board of Directors of Indus Motor Company Ltd. (IMC) met on August 30, 2022, to review the Company’s financial and operating performance for the year ended June 30, 2022.
The company posted a profit of Rs. 15.80 billion during the year, up by 23.24 percent as compared to a profit of Rs. 12.82 billion in the same period last year. Along with the result, the company also announced a cash dividend of Rs. 3.25 per share.
However, the earnings during the last quarter had a massive blow, depicting a decline of 88 percent YoY and 90 percent QoQ. The massive fall in the profit was a result of lower gross margins and higher taxation due to the imposition of super tax.
Indus Motors booked a effective taxation at 88 percent in 4QFY22, showcasing a huge impact of super tax on the company.
The company posted net sales revenue of Rs. 275.50 billion, a 54 percent increase compared to Rs. 179.16 billion last year. The increase in sales was due to an increase in volumetric sales (Corolla and Yaris up 30 percent, Fortuner and Hilux up 70 percent) along with multiple price increases during the year.
The cost of sales saw a massive increase of 58.22 percent, standing at Rs. 257 billion as compared to Rs. 162 billion.
However, gross margins abruptly fell to 6.68 percent in FY22 compared to 9.3 percent in FY21, due to augmented inflation, a massive uptick in imported raw material prices (especially steel prices) as well as rupee depreciation.
Other income of the company saw an increase of 132 percent to Rs. 12.93 billion during the year as compared with Rs. 5.79 billion due to a higher cash balance from increased order intake. Earnings per share of the company increased to Rs. 201.04 from Rs. 163.21.
INDU’s scrip at the bourse was closed at Rs. 991.43, down by Rs. 28.66 or 2.88 percent with a turnover of 10,179 shares on Tuesday.
Production Cuts
Toyota IMC is likely to witness a decline in its earnings in the coming days due to production pauses.
A recent notice suggests that the company will suspend its production and assembly operations from September 1-14, 2022 due to a new mechanism that requires CKD import approval from the State Bank of Pakistan (SBP).
The company states that this has created hurdles in importing knockdown kits, causing inventory problems for them.
The notification reads:
Due to insufficient inventory levels to maintain production, the company has decided to temporarily halt its production activities. In the light of above, the company has decided to temporarily shut down its production from 1st September 2022 to 16th September 2022. However, in case of any change in production plan due to approvals being sought, the same will be communicated accordingly.
It bears mentioning that several other car companies have resumed bookings for their cars, which may place Toyota IMC’s spot as one of the top sellers in Pakistan in question.
I wonder how much of their profits have been reinvested in Pakistan in last 20 years.