KARACHI: The country’s largest car assembler, Pak Suzuki Motor Company Limited, has reported a net loss of Rs 9.68 billion for the year ended June 30, 2023 to the Pakistan Stock Exchange.
The company’s sales fell following import restrictions and weak demand and its losses, as reported in a statement to the PSE, widened significantly from last year’s loss of Rs 17.238 million.
Investors in automobile manufacturers also missed out on profits for the said period.
The decline in the company’s sales came after its operations were disrupted during the said period due to inventory shortages.
Compared to a loss per share (LPS) of Rs 0.21 for January to June 2022, LPS came in at Rs 117.58 this year.
Pak Suzuki said its revenue for the year stood at Rs 43.182 billion, as against Rs 112.624 billion last year.
However, the cost of sales stood at Rs 39.037 billion as against Rs 108.415 billion during the same period last year. Finance cost increased to Rs 10.141 billion as compared to Rs 1.842 billion last year, widening the losses.
For the quarter ended June 30, the company reported a profit of Rs 3.238 billion, as against Rs 442.989 million during the same quarter last year. Earnings per share for the quarter came in at Rs 39.36 compared to Rs 5.38 last year.
Analysts said the second-quarter result came in above street consensus due to several hikes in car prices during the period and a financial gain of Rs 2.6 billion due to currency depreciation in JPY/PKR. Driven by exchange benefits. Equality
The company posted revenue of Rs 21.3 billion, down 67 percent year-on-year and 2 percent quarter-on-quarter, due to a raw material supply shock due to import restrictions and weak demand.
The company posted a gross profit margin of 10% in 2QCY23 as against 4% in the same period last year. This increase is due to several hikes in car prices in 1HCY23. The company recorded other income of Rs774 million in 2QCY23, down 25% year-on-year as short-term investments declined due to lower advances from customers.
PSMC recorded a financial income of Rs 2.6 billion in 2QCY23 as against a financial cost of Rs 811 million in the same period last year. This is due to exchange gains from the depreciation of the Japanese yen.
The country’s auto sector is particularly facing economic difficulties, including the inability to secure letters of credit (LCs) needed for the sector’s imports.
Apart from the LC issue, the sector is facing a slowdown in demand due to high prices and record high interest rates. A falling rupee is not helping either.
According to data provided by the Pakistan Automotive Manufacturers Association (PAMA), car sales declined by 57 percent year-on-year (YoY) in the first month of the fiscal year 2023-24.
Car manufacturers registered with PAMA sold a total of just 5,092 units in the month of July. According to the data, the month-on-month (MoM) decline was 16 percent.
