Pak Suzuki’s profit surges 151% to Rs1.1b

Earnings per share stand at Rs13.43 in Jul-Sep

KARACHI: Pak Suzuki Motor Company - the largest selling car manufacturer in the country - has posted a net income of Rs1.1 billion in the quarter ended on September 2017, up 151% compared to Rs438 million in the same period of the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

Earnings per share (EPS) stood at Rs13.43 compared with Rs5.32 in the period under review. In the first nine-month period ending on September 2017, the company earned a net profit of Rs3.09 billion, up 65% compared with Rs1.87 billion in the same period of last year.

According to a Topline Securities report, the results were in-line with expectations. The KSE-100 index closed at 41,291, down 191 points or 0.46%. Pak Suzuki share price closed at Rs488, down 1.53%.



The company revenues grew 46% year-on-year in third quarter due to volumetric growth of 30% in unit sales, change in sales mix as sale of higher value units increased and price increase of Bolan and Ravi variants, the report added.

Earnings growth was led by both revenue growth and better margins.

The top car maker higher volumes were supported by sales of Mehran, ‘Wagon-R’ and New Cultus (launched last quarter), which constitute around 70% of total volume.

The company sold 32,777 units during the third quarter, up by 30% year-on-year, where sales of Mehran touched 10,516 units, up 27% year-on-year. Cultus, which lately has been well received by buyers, saw sales touch 5,181 units, up 56% year-on-year.

Volumetric growth of Suzuki Wagon-R remained the most impressive with volumes reaching 5,789 units in third quarter, up 71% year-on-year.



On a year-on-year basis, gross margins are up by 277 basis points and touched 9.8% from 7.3% last year due to higher economies of scale, 13% increase in average sale price of variants subsequent to second quarter of 2016 and increase in sales of higher margin variants such as Cultus.

In nine months period, revenue grew by 28% and earnings grew by 65% led by volumetric growth of 13% year-on-year.

On a sequential basis, net revenues increased by 13% in third quarter of 2017. Earnings on quarter-on-quarter basis rose 61% primarily on the back of higher volumetric growth and absence of super tax, which was accounted for in second quarter of 2017.

Published in The Express Tribune, October 25^th, 2017.

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