Pak Suzuki Motor Company Limited (PSMC) has announced its highest-ever loss after tax (LAT) of Rs. 12.91 billion in the first quarter that ended on March 31st, 2023 (1Q2023), the company had reported a loss of Rs. 460 million in the same period last year.
According to Topline Securities, this takes Pak Suzuki’s equity to around Rs. 7 billion in Q12023 as compared to Rs. 20 billion in Q42022.
The result came below industry expectations due to higher-than-expected finance cost. Finance cost which includes exchange loss, markup on late delivery, and demurrage and detention charges up 12x year on year and 3x quarter on quarter to Rs. 12.8 billion.
To recall, the company along with the last financial result informed that post-year-end rupee devaluation against US Dollar has resulted in an unrealized loss of Rs. 9 billion which will impact the 2023 financial results.
The net sales of the company decreased by 54 percent year-on-year (YoY) to Rs. 21.8 billion as compared to Rs. 47.7 billion last year amid subsequent price hikes and production slowdowns in the past few months.
According to the automaker’s financial results for 1Q2o23, the company posted a loss of Rs. 156 per share as compared to a loss per share of Rs. 5.59 per share last year.
The gross profit of the company increased by 47 percent YoY from Rs. 1.35 billion to Rs. 1.98 billion. Gross margins clocked in at 9.1 percent during the period in review, which is slightly lower than the previous quarter despite the hike in car prices.
Other income during 1Q2023 collapsed by 86 percent to Rs. 73.7 million as compared to Rs. 527.3 million due to a decline in the number of bookings.
PSMC’s scrip at the bourse closed at Rs. 99.64, down by Rs. 1.13 or 1.12 percent, with a turnover of 166,549 shares on Tuesday.
Production Curbs and Sales in Red
Intermittent production shutdowns since last year and the unavailability of completely knocked down (CKD) kits are one of the main reasons for the heavy losses incurred by PSMC during Q1. The majority of the automakers have blamed the State Bank of Pakistan’s (SBP) reluctance to approve letters of credit (LCs) for the clearance of imported goods, which has forced plants to close production.
January and February have been particularly unforgiving for Pakistan’s biggest carmaker by sales volume. As per the report from Pakistan Automotive Manufacturer’s Association (PAMA), Pak Suzuki sold fewer than 1,000 units in February.
This is the automaker’s worst performance yet since countrywide COVID-19 lockdowns in April 2020, which saw production and sales reach zero. Before that, Suzuki sold fewer than 3,000 units, which is the individual sales figure of a Suzuki Alto under normal circumstances.
To make matters worse, Suzuki also increased the prices of its cars by up to Rs. 1.2 million in Q1 2023. That, coupled with the intermittent production shutdowns, makes for a bleak future outlook for the company.
Stay Connected with ProPakistani
Get the latest automobile news, car launches, bike reviews, videos and analysis wherever you prefer.
Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
agar in rates par bhee inko loss ha to phir to hamesha k liy bann kr dana chahye
The thing is they don’t want to reduce their profits… and sitting on the hype train to raise prices. More sales could be a way to increase overall profit but real thing is they are still making alot more than before for what they are working and investing. So in the end the loss is for customers not them.
Sorry for the temporary loss, which is only a penny compared to the profit they were able to make from us by giving us only a piece of inferior steel box that had been welded. They do not even include the car specifications for safety testing on their list of priorities. The government is even more concerned with their own financial benefit by granting them a licence than with the vehicle’s safety features and the amount they charge consumers for their steel boxes.
Hard to believe this extent of loss in 1Q2023. On the other hand, Suzuki has increased price of its each brand beyond more than of what exchange rates increased.
Matter is that Suzuki should give some relief to public by reducing its profit and hence increase sales/overall profit
It’s not a loss, this is called transfer pricing to avoid taxes….
6 month payments apny pass rahk kr… b loss hy inahay… 20 lahk apny pass rahaka.. after6 month phir mugy Gari mili.. as per company policy..kibor check b nahi miliy customer ko.. phir b loss!!!!
pata nahe dil khush hota ha inka loss dekh kar
Suzuki is going like maryum nawaz family
Ye Allah Ka azab he in par Jo Allah ne in kaa kaam ban karwaya howa he.ghatya garyan banate or baychte or keemat asmono wali lagate hayn.logon ki majburi Ka ghalat faida uthaya he in tamam companion ne.
What loss means even if the factories were closed and they have to pay the salaries only .is it loss of employee salaries or loss of expected profits they should be accumulating.whatever the way forward only be to manufacture 100% locally.instead of paying commissions services to Elites politician .stop CKD imports
Instead of importing more than 90% of components, if they and all the major players in the automotive industry has gone for the localisation of the part, this huge increase in price could have been avoided. See in India, all the major automotive company area using more than 90% locally produced parts. Thus reducing the cost.
شکر الحمدللّہ
May be monoply reduced.
They should suffer more loss because they are looting the public. They charge a high rates for a low quality and cheap cars.
Imported Cars are much better than suzuki cars in terms of value for money
jop
Suzuki Is company I need help to Suzuki company helps me business Suzuki showroom I want to More helps growing in future 00923193272402
Hum happy na ho go samjh ati hay lekin yeh to bilkul b happy ni hain ohh bhai kiya chahtay ho??
Unbelieveable !!!! Even though increased prices by 5 times or more thet declared loss..
DIL GAWARA NAHI KARTA …
Khuda garaq kare is ghtiya company ko they should role there bed and leave this country
سوزوکی نے اپنی پیداوار 1979 میں اس عزم کے ساتھ پاکستان میں شروع کی کہ سوزوکی کاریں 5 سال کے بعد پاکستان میں تیار کی جائیں گی۔ وہاں کاریں معیاری اور بہت زیادہ قیمت والی ہیں۔ کوئی بھی کمپنی جو 5 سالوں میں گاڑیوں کی مکمل تیاری شروع نہیں کرتی ہے اسے پاکستان چھوڑنے کے لیے کہا جانا چاہیے۔ کمیشن مافیا جو ان کمپنیوں کی حفاظت کر رہی ہے انہیں مثالی سزائیں دی جانی چاہئیں کیونکہ وہ ملک کو گھٹنے ٹیکنے کی ذمہ دار ہیں۔