KARACHI: Indus Motor Company’s earnings dipped 13% to Rs13.7 billion in the year ended June 30, 2019 partly due to depreciation of the rupee against the US dollar.
The company had reported a profit of Rs15.8 billion in the previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Tuesday.
The board of directors announced a final cash dividend of Rs27.5 per share, which was in addition to the already paid combined interim cash dividend of Rs87.5 per share.
Indus Motor increases vehicle prices
Earnings per share of the company stood at Rs174.49 in the period under review compared to Rs200.66 in the previous year.
Net sales declined 13.1% to Rs158 billion due to a drop in car sales. A massive rupee depreciation, increase in duties on imported raw material and change in the sales mix from high margin vehicles to low margin ones played a key role in denting the company’s profits.
Topline Securities’ analyst Hammad Akram said, “The significant decline recorded in earnings is due to depletion in gross margins owing to dollar appreciation against the rupee and inflationary environment.”
He said revenues declined on the back of lower volumetric sales, which were impacted negatively due to a continued hike in prices.
Akram highlighted further rupee depreciation, slowdown in the economy and adverse regulatory changes as key risks for the company.
Indus Motor increases Corolla, Fortuner prices by 10%
Share price of the company increased Rs5.88, or 0.56%, to close at Rs1,061.82 with trading in just 4,840 shares at the PSX.
The benchmark KSE-100 index was up 64.25 points, or 0.21%, on Tuesday to settle at 30,584.85 points.
Other income of the company rose 10.4% to Rs4.3 billion in the period under review whereas finance cost was down 16.1% to Rs67.4 million compared to Rs80.3 million in the same period of previous year.
Published in The Express Tribune, August 28th, 2019.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ