Indus Motor's profit increases 19%, stands at Rs3.63 billion

EPS amounts to Rs46.17 for July-September, dividend of Rs30 announced

KARACHI: Indus Motor, the makers of Toyota Corolla in Pakistan, posted a net income of Rs3.63 billion in the quarter ended September 2017, up 19% compared with Rs3.05 billion in the comparative period of the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).

Earnings per share (EPS) increased to Rs46.17 compared with Rs38.77 in the same period of the previous year.

Topline Securities reported that the results were in-line with expectations.

The company also announced an interim cash dividend of Rs30 per share for the quarter.



Indus Motor’s share price closed at Rs1,772, down 0.61% on a day when the KSE-100 Index was down 0.73%.

Company sales, which increased by 21% year on year, remained above expectations during the first quarter of the fiscal year 2018 where higher priced variants contributed more towards the sales mix, the research report added.

The company sold a total of 15,087 units during the first quarter of fiscal year 2018, up by 5% year on year.

Amid improving volumes of higher priced variants, average revenue per car also grew by 16% year on year. Due to a 3% price increase on all variants in August 2017 and higher than anticipated sales of Toyota Fortuner (high margin Sport Utility Vehicle), revenues and margins witnessed strong growth.

Fortuner now constitutes 5% of total unit sales compared to just 1% last year. Gross profits increased 18% year on year while gross margins increased by 121 basis points to 17.4% from 16.2% year on year in the outgoing quarter.

Despite rising steel prices (up by 15% quarter on quarter), the tilt of the company’s product mix towards higher-priced variants ensured higher gross margins. On sequential basis, net revenues increased by 12% while gross margins increased by 91 basis points quarter on quarter to 17.4%



Earnings on quarter on quarter basis also rose by 32% due to absence of super tax impact in outgoing quarter.

Key risks for the company include unfavorable movement in exchange rate and commodity prices, regulatory changes that can allow import of used cars, increased competition from existing and new players and disruptions in operations of principal company, the report added.

Published in The Express Tribune, October 28^th, 2017.

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