Toyota Indus Motor Company (IMC) Limited has posted a profit of Rs. 1.297 billion for the first quarter that ended on September 30, the financial year 2022-23, down by 76 percent as compared to a profit of Rs. 5.42 billion in the same period last year.
Along with the result, the company has also announced an interim cash dividend of Rs. 8.2 per share.
Net sales of the company decreased by 43 percent to Rs. 37.24 billion as compared to Rs. 65.5 billion primarily as a result of a 51 percent/52 percent QoQ/YoY decline in car sales volumes.
The decrease in revenue could be due to a rise in compensation on advances from customers and car price revisions yet to reflect as cars might have been sold at March-April 2022 prices during the quarter, said Ismail Iqbal Securities in its report.
The basis of the deviation was lower than estimated revenues and negative gross margin.
Gross margins fall to lowest-ever levels of -6.3 percent on account of PKR depreciation, weakness in topline, and higher cost of raw materials.
Other income of the company saw a substantial growth of 152 percent as it was reported at Rs. 5.16 billion as compared to Rs. 2.04 billion recorded in the same period last year, mainly driven by higher interest income on increased advances from customers.
The company booked an effective tax rate of 29.5 percent against 88.1 percent recorded in the last quarter.
Toyota IMC posted earnings per share (EPS) of Rs. 16.5 as opposed to EPS of Rs. 69.
INDU’s scrip at the bourse was closed at Rs. 923.31, down by Rs. 12.56 or 1.34 percent, with a turnover of 3,605 shares on Thursday.
Sales Decline
Last month, Toyota IMC predicted a massive decline in sales. The automaker revealed in its previous briefing that it is only working at 40-45% production capacity as State Bank limits car kit imports.
It added that soaring car prices, an increase in interest rates, sanctions on car financing, supply chain challenges, and restrictions on complete knockdown kits (CKD) imports are also major contributing factors to the diminishing demand.
Toyota IMC is likely to witness a decline in its earnings in the coming days due to production pauses. The company is still observing non-production days (NPDs) 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.
