Indus Motor Company Limited (PSX: INDU) has announced its financial results for the year that ended on June 30, 2023.
The company reported a profit of Rs. 9.66 billion in FY23, down 38.8 percent year-on-year (YoY) from Rs. 15.8 billion in the same period last year. Losses are most likely attributed to the massive decline in car sales volume due to extortionate rates, rupee devaluation, low consumer purchasing power, and overall high inflation during the period.
Along with the result, INDU announced a final cash dividend for the year ended June 30, 2023, at Rs. 29 per share i.e. 290 percent. This is in addition to the combined interim cash dividend of Rs. 42.8 percent. The total dividend for 2022-23 will amount to Rs. 71.8 per share.
The net sales of the company decreased by 35 percent YoY to Rs. 177.7 billion in FY23 as compared to Rs. 275 billion in FY22.
The sales of the company in 4QFY23 arrived at Rs. 42.6 billion, declining by 11 percent QoQ primarily as a result of 24 percent dip in car sales volumes, according to Ismail Iqbal Securities. Despite the decline in the revenue, gross margin has been very impressive during the quarter recording 18.1 percent (highest since March 2017) which could be a result of the materialization of price hikes in the last quarter and possibly on account of year-end adjustments.
Gross margins clocked in at 4.5 percent during FY23, lower than the 6.7 percent recorded in SPLY.
The gross profits of the company decreased by 57 percent YoY to Rs. 7.93 billion from Rs. 18.4 billion in SPLY.
Meanwhile, the other income of the company rose by 9.6 percent to Rs. 14.1 billion as compared to Rs. 12.9 billion in FY22. Also, other income has fallen by 17 percent QoQ to Rs. 2.5 billion amid a contraction in cash and cash equivalents held by the company.
Finance cost surged by 23 percent to Rs. 140.7 million as compared to Rs. 114.3 million reported in the same period last year.
Lastly, the company has booked taxation of Rs. 7.13 billion in FY23 as compared to Rs. 9.65 billion in FY22.
According to the automaker’s financial results, the company posted earnings of Rs. 122.96 per share as compared to EPS of Rs. 201.04 per share last year.
At the time of filing, INDU’s scrip at the bourse was Rs. 963, up by Rs. 13 or 1.37 percent, with a turnover of 960 shares on Monday.
Operational Outlook
Toyota has sustained a massive dip in sales compared to last month. According to a monthly report from Pakistan Automotive Manufacturers Association (PAMA) Toyota Indus Motor Company (IMC) sold 1,368 cars, reporting a 26% Month-over-Month (MoM) decrease in sales.
The poor sales figures are mostly due to a significant decline in the sales of Toyota Hilux and Fortuner. For the past several months, both were among the best-selling vehicles in Pakistan, despite the crippling inflation.
Due to continued operational hiccups and economic challenges, Toyota IMC has announced another series of non-production days (NPDs) from August 25 to September 6, 2023. The latest notification also mentions the lowered sales as a reason for the diminished demand.
With continued issues, Toyota IMC’s profit may not recover anytime soon.
