Pak Suzuki Motor records loss of Rs2.9b

It comes on back of high finance cost, lower sales

KARACHI: Pak Suzuki Motor Company has announced a loss of Rs2.92 billion for the year ended December 31, 2019, following an increase in finance cost, slowdown in sales and the overall economy.

The company had reported an after-tax profit of Rs1.3 billion in the previous year, according to a notice sent to the Pakistan Stock Exchange (PSX) on Friday.

The company reported loss per share of Rs35.49 for 2019 compared to earnings per share of Rs15.77 in the previous year.

The gross profit of the company took a hit as it fell 72% to Rs1.98 billion in 2019 from Rs7.04 billion in 2018. Despite a hike in car prices, the automaker's earnings did not improve as sales remained low.

The decline in sales was mainly due to higher vehicle prices and high interest rates for car financing.

Pak Suzuki Motor records loss of Rs1.16b

Finance cost of the company surged exponentially by more than four times on a year-on-year basis to Rs2.1 billion from Rs362.5 million.

According to a Topline Securities' report, "The company faced an incremental working capital requirement due to higher inventory levels, which eventually led to higher utilisation of working capital loans."

On the other hand, other income of the company dropped from Rs565.9 million in 2018 to Rs222.5 million in the year under review.

Pak Suzuki's share price dipped Rs4.28 or 2.73% to close at Rs152.67 with a turnover of 94,000 shares. At close, the benchmark KSE-100 index recorded an increase of 537.58 points, or 1.78%, to settle at 30,667.41.

Published in The Express Tribune, March 21^st, 2020.

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