Corporate results: Pak Suzuki’s profit falls 76%, share price plummets
EPS also declined massively to Rs5.32 during July-September
In the April-June quarter alone, the company’s profit dropped 67% to Rs487.84 million from Rs1.47 billion in the corresponding period last year. PHOTO: PAK SUZUKI
KARACHI:
Pak Suzuki Motor Company (PSMC) - the country’s largest car maker - has posted a net profit of Rs438 million in the quarter ended September 30, down by a massive 76% compared to Rs1.81 billion in the same quarter last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) also declined considerably to Rs5.32 from an EPS of Rs22.11 in the period under review.
The result was below market expectations, according to a Topline Securities report.
The KSE-100 Index closed at 40,764, down 87 points or 0.21%. However, PSMC’s share price declined massively to Rs536.22, down 4.97%.
Company’s sales fell 16% year-on-year to Rs17.7 billion in third quarter of 2016 (3Q2016). This decline was mainly due to drop in volumetric sales post culmination of the Apna Rozgar Taxi Scheme of Punjab government.
PSMC’s sales volume in the outgoing quarter was 25,201 units, a decline of 34% year-on-year (down 17.5% year-on-year to 82,504 units in nine months of 2016 (9M2016).
Excluding taxi units (Ravi and Bolan), sales were robust as they increased 19% year-on-year in 3Q2016 (34% year-on-year to 78,304 units in 9M2016).
Gross profit fell massively by 63% year-on-year to Rs1.3 billion in the outgoing quarter while gross margins contracted by 9 percentage points (ppts) to 7%. This can be attributed to further 1.5% appreciation of the yen against the rupee to post an aggregate 10.5% appreciation for last two quarters.
To point out, appreciation of the yen was due to Brexit, fears of which have eased out. Further, higher input cost due to higher steel prices kept gross profit margin under pressure. On quarter-on-quarter basis, revenue fell 6% due to 7.6% decline in volumes. Gross margins contracted 2.3 percentage points (ppts) from 9.4% in second quarter of 2016 (2Q2016).
In 9M2016, sales fell by 7% year-on-year to Rs56.8 billion. However, gross profit fell by 38% year-on-year to Rs5.2 billion and gross margins fell 5.3 ppts to clock-in at 9.1%.
Adverse exchange rate movement, delay in introduction of Suzuki Celerio variant, fluctuation in input i.e steel costs, implementation of international safety standards and reduction in import duty are key risks for PSMC, the report added.
Published in The Express Tribune, October 26th, 2016.
Pak Suzuki Motor Company (PSMC) - the country’s largest car maker - has posted a net profit of Rs438 million in the quarter ended September 30, down by a massive 76% compared to Rs1.81 billion in the same quarter last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) also declined considerably to Rs5.32 from an EPS of Rs22.11 in the period under review.
The result was below market expectations, according to a Topline Securities report.
The KSE-100 Index closed at 40,764, down 87 points or 0.21%. However, PSMC’s share price declined massively to Rs536.22, down 4.97%.
Company’s sales fell 16% year-on-year to Rs17.7 billion in third quarter of 2016 (3Q2016). This decline was mainly due to drop in volumetric sales post culmination of the Apna Rozgar Taxi Scheme of Punjab government.
PSMC’s sales volume in the outgoing quarter was 25,201 units, a decline of 34% year-on-year (down 17.5% year-on-year to 82,504 units in nine months of 2016 (9M2016).
Excluding taxi units (Ravi and Bolan), sales were robust as they increased 19% year-on-year in 3Q2016 (34% year-on-year to 78,304 units in 9M2016).
Gross profit fell massively by 63% year-on-year to Rs1.3 billion in the outgoing quarter while gross margins contracted by 9 percentage points (ppts) to 7%. This can be attributed to further 1.5% appreciation of the yen against the rupee to post an aggregate 10.5% appreciation for last two quarters.
To point out, appreciation of the yen was due to Brexit, fears of which have eased out. Further, higher input cost due to higher steel prices kept gross profit margin under pressure. On quarter-on-quarter basis, revenue fell 6% due to 7.6% decline in volumes. Gross margins contracted 2.3 percentage points (ppts) from 9.4% in second quarter of 2016 (2Q2016).
In 9M2016, sales fell by 7% year-on-year to Rs56.8 billion. However, gross profit fell by 38% year-on-year to Rs5.2 billion and gross margins fell 5.3 ppts to clock-in at 9.1%.
Adverse exchange rate movement, delay in introduction of Suzuki Celerio variant, fluctuation in input i.e steel costs, implementation of international safety standards and reduction in import duty are key risks for PSMC, the report added.
Published in The Express Tribune, October 26th, 2016.