Pak Suzuki reports loss of Rs2.46 billion
Says decision to maintain three-year-old limit on used car imports is the only positive. PHOTO: FILE
Pak Suzuki Motor Company reported a loss of Rs2.46 billion for the January-June period of 2020 on the back of increase in operating and gross losses as demand for cars remained low.
The company had reported a loss of Rs1.52 billion in the same period of previous year, according to a company notification sent to the Pakistan Stock Exchange on Wednesday.
The company reported loss per share of Rs29.92 during the half-year period under review compared to Rs18.53 in the same period of previous year.
“Gross margins turned negative to 6.29%, down by 729 basis points year-on-year and 952bps quarter-on-quarter as compared to 1% in 2QCY19 and 3.23% in 1QCY20. The decline came on account of currency depreciation and higher fixed cost per unit,” stated an AHL Research report.
Net sales of the company declined 58% to Rs27.5 billion in the period under review due to fall in unit sales, impact of Covid-19 outbreak and low demand due to high cost of financing.
“The demand for new cars remained depressed throughout 1H2020 amidst high car prices and negative impact of Covid-19 on consumer buying,” commented Topline Securities’ analyst Hammad Akram.
Other income of the company soared by a hefty 98% to Rs194 million during the half-year period of 2020 from Rs98 million in the previous year.
Meanwhile, finance cost of the company grew by a massive 175% to Rs1.9 billion due to rise in borrowings to meet working capital requirement.
Published in The Express Tribune, August 20th, 2020.
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