Droop in gross sales triggers Rs9.6bn half-year loss for Pak Suzuki

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Staff assemble vehicles contained in the Hyundai Motor India Ltd. plant at Kancheepuram district within the southern Indian state of Tamil Nadu October 4, 2012. — Reuters
  • Firm remained non-operational throughout first-half of 2023.
  • Loss per share for PSMC was Rs117.58 throughout yr’s first half.
  • Auto producer’s income slumped to Rs43.182 billion this yr.

KARACHI: The nation’s largest automobile assembler, Pak Suzuki Motor Firm Restricted, has reported a Rs9.68 billion web loss for the year-ended June 30, 2023, to the Pakistan Inventory Alternate, The Information reported Saturday. 

The corporate’s gross sales took a plunge following import restrictions and weak demand and its losses, as reported within the assertion despatched to PSE, jumped considerably from final yr’s lack of Rs17.238 million. 

The auto producer’s buyers additionally missed a dividend for the aforementioned interval.

The drop within the firm’s gross sales got here following a halt in its operations through the mentioned interval on account of stock shortages.

In contrast with a loss per share (LPS) of Re0.21 from January to June 2022, the LPS got here in at Rs117.58 this yr. 

Pak Suzuki acknowledged that its income for the yr slumped to Rs43.182 billion, as in comparison with Rs112.624 billion final yr.

The price of gross sales, nevertheless, remained at Rs39.037 billion from Rs108.415 billion throughout the identical interval final yr. Finance prices rose to Rs10.141 billion in opposition to Rs1.842 billion final yr, which elevated losses.

For the quarter ended June 30, the corporate introduced a revenue of Rs3.238 billion, in contrast with Rs442.989 million throughout the identical quarter final yr. Earnings per share for the quarter got here at Rs39.36 in contrast with earnings per share (EPS) of Rs5.38 final yr.

Analysts mentioned the second quarter end result got here above avenue consensus due to the upper gross margin on the again of a number of automobile worth hikes through the interval and finance revenue of Rs2.6 billion, pushed by the trade features on account of the decline in JPY/PKR parity.

The corporate posted income of Rs21.three billion, down by 67% year-on-year and a pair of% quarter-on-quarter due to decrease volumetric gross sales on the again of uncooked materials provide shocks on account of import restrictions and weak demand.

The corporate posted a gross revenue margin of 10% in 2QCY23 versus 4% in the identical interval final yr. The surge is attributed to a number of automobile worth hikes in 1HCY23. The corporate recorded different revenue of Rs774 million in 2QCY23, down 25% year-on-year due to a lower in short-term funding on account of a decline in advances from clients.

PSMC recorded a finance revenue of Rs2.6 billion in 2QCY23 versus the finance price of Rs811 million in the identical interval final yr. That is attributed to trade features pushed by the depreciation of the Japanese yen.

The nation’s auto sector is particularly dealing with financial headwinds, together with the sector’s lack of ability to safe Letters of Credit score (LCs) wanted for imports.

Along with the LC challenge, the sector can also be confronted with depressed demand on account of larger costs and record-high rates of interest. A falling rupee will not be serving to both.

Automotive gross sales dropped by a whopping 57% year-on-year (YoY) within the first month of the fiscal yr 2023-24, as per information given by Pakistan Automotive Producers Affiliation (PAMA).

The registered automobile producers with PAMA cumulatively offered solely 5,092 items within the month of July. The month-on-month (MoM) lower stood at 16%, as per the info.

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