Pak Suzuki Motor posts Rs1.53b loss
Decline in earnings mainly due to massive fall in gross profit margins
Representational image. PHOTO: REUTERS
KARACHI:
Pak Suzuki Motor Company’s earnings were massively dented as the automaker declared a loss of Rs1.53 billion in the six months ended June 2019.
The company had reported a profit of Rs1.3 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange on Wednesday.
The significant decline in earnings was mainly due to massive reduction in gross profit margins by five percentage points, said Topline Securities’ analyst Hammad Akram. Pak Suzuki recorded loss per share of Rs18.53 in the January-June 2019 period, compared to earnings per share of Rs15.77 in the same period of previous year.
Pak Suzuki raises car prices by up to Rs100,000
“A massive tax reversal of Rs1.053 billion was the saviour for the company,” said JS Research analyst Ahmed Lakhani. Gross profit plunged 74.7% to Rs1.37 billion in the period under review from Rs4.37 billion in the previous year. “Gross profit margins were down by 14% in 2QCY19 due to significant rupee depreciation against the US dollar coupled with the inflationary environment leading to high input costs,” the analyst said.
On the other hand, finance cost surged a massive 660.7% to Rs706.4 million from Rs92.9 million in the previous year due to addition of short-term borrowing.
Meanwhile, other income declined 74.8% during the six-month period to Rs97.97 million on the back of low income from bank deposits as the company reduced cash balance in its accounts after decline in advance payments from customers, Akram said. Pak Suzuki’s stock price closed at Rs184.01 at the PSX, down Rs7.31, with trading in 110,000 shares. The KSE-100 index closed at 32,401.40 points, down 314.48 points on Wednesday.
Pak Suzuki revises up car prices after rupee fall
Three-month period
Pak Suzuki fared no better in the April-June period as well as it reported a loss of Rs544.6 million compared to profit of Rs393.5 million in the previous year.
The company posted loss per share of Rs6.62 compared to earnings per share of Rs4.78 in the same period of last year.
“During the outgoing quarter, revenue of the company recorded a mere 1% year-on-year growth to Rs31 billion despite multiple hikes in vehicle prices owing to declining volumetric sales in the said period,” stated Akram.
He said distribution cost also jumped 56% year-on-year due to higher transportation costs (from factory to dealer), which is currently borne by the company.
Published in The Express Tribune, July 25th, 2019.
Pak Suzuki Motor Company’s earnings were massively dented as the automaker declared a loss of Rs1.53 billion in the six months ended June 2019.
The company had reported a profit of Rs1.3 billion in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange on Wednesday.
The significant decline in earnings was mainly due to massive reduction in gross profit margins by five percentage points, said Topline Securities’ analyst Hammad Akram. Pak Suzuki recorded loss per share of Rs18.53 in the January-June 2019 period, compared to earnings per share of Rs15.77 in the same period of previous year.
Pak Suzuki raises car prices by up to Rs100,000
“A massive tax reversal of Rs1.053 billion was the saviour for the company,” said JS Research analyst Ahmed Lakhani. Gross profit plunged 74.7% to Rs1.37 billion in the period under review from Rs4.37 billion in the previous year. “Gross profit margins were down by 14% in 2QCY19 due to significant rupee depreciation against the US dollar coupled with the inflationary environment leading to high input costs,” the analyst said.
On the other hand, finance cost surged a massive 660.7% to Rs706.4 million from Rs92.9 million in the previous year due to addition of short-term borrowing.
Meanwhile, other income declined 74.8% during the six-month period to Rs97.97 million on the back of low income from bank deposits as the company reduced cash balance in its accounts after decline in advance payments from customers, Akram said. Pak Suzuki’s stock price closed at Rs184.01 at the PSX, down Rs7.31, with trading in 110,000 shares. The KSE-100 index closed at 32,401.40 points, down 314.48 points on Wednesday.
Pak Suzuki revises up car prices after rupee fall
Three-month period
Pak Suzuki fared no better in the April-June period as well as it reported a loss of Rs544.6 million compared to profit of Rs393.5 million in the previous year.
The company posted loss per share of Rs6.62 compared to earnings per share of Rs4.78 in the same period of last year.
“During the outgoing quarter, revenue of the company recorded a mere 1% year-on-year growth to Rs31 billion despite multiple hikes in vehicle prices owing to declining volumetric sales in the said period,” stated Akram.
He said distribution cost also jumped 56% year-on-year due to higher transportation costs (from factory to dealer), which is currently borne by the company.
Published in The Express Tribune, July 25th, 2019.