Indus Motor's profit dives 20% to Rs2.67b

Board also announces cash dividend of Rs10 per share

KARACHI: Indus Motor Company booked a 20% dip in profit to Rs2.67 billion for the quarter ended March 31, 2020 on back of lower sales.

The company had reported earnings of Rs3.34 billion in the same period of 2019, according to a notice sent to the Pakistan Stock Exchange (PSX) on Friday.

Furthermore, the board of directors also announced an interim cash dividend of Rs10 per share, ie 100%, for the quarter. This is in addition to the combined interim cash dividend of Rs13 per share ie 130% already paid.

Earnings per share came in at Rs34.06 for the quarter under review against Rs42.56 in the same quarter of previous year.

"The earnings came in above industry expectations on the back of higher-than-expected gross margins," said Topline Research analyst Hammad Akram. Net sales of the company fell 20.4% to Rs33.1 billion in the three-month period of 2020 compared to Rs41.5 billion in the same period of the previous year.

"Decline in sales came on back of lower unit sales as company recorded sales of 11,125 units in 3QFY2020 compared to 16,935 units in 3QFY2019."

For the outgoing quarter, total unit sales recorded significant growth of 49% quarter-on-quarter, mainly due to the New Year effect and multiple promotions and discounts offered on 1.3L variants by the company, Akram commented.

Meanwhile, other income increased from Rs1.06 billion in Jan-Mar period of last year to Rs1.11 billion in the same quarter of current year.

On a quarter-on-quarter basis, the improvement in other income was seen due to improved cash flows amid higher sales, the analyst stated. On the other hand, finance cost of the company increased by 25.7% to Rs16.25 million in the three month period under review.

Share price of Indus Motor Company rose Rs25.08 or 2.87% to trade at Rs899.24 with a turnover of 39,300 shares at the PSX.

Published in The Express Tribune, April 25^th, 2020.

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