Pak Suzuki returns to profit, earns Rs2.7b
PHOTO: REUTERS
Pak Suzuki Motor Company reversed losses in 2021 as it recorded a profit of Rs2.68 billion due to the plunge in finance cost coupled with the spike in other income.
According to a notice sent to the Pakistan Stock Exchange on Tuesday, the company had reported a loss of Rs1.38 billion in 2020.
Earnings per share of the car manufacturer came in at Rs32.56 in 2021 against loss per share of Rs16.75 in 2020.
Alongside the result, the company announced a final cash dividend of Rs6.5 per share.
“The surge in profit is mainly attributable to the improved volumetric sales (+108% year-on-year), increased car prices, higher other income as well as reduction in financial charges, given a significant decline in borrowing,” commented Arif Habib Limited analyst Mah-e-Rukh Fatima.
Topline of the company skyrocketed to Rs160.1 billion in 2021 from Rs76.7 billion a year earlier.
Company’s margins came in at 5.1% in 2021 compared to previous year’s margins of 4.69% (+40 basis points), as the augmented topline offset the impact of rising cost pressures, she said.
Distribution cost soared from Rs1.64 billion in 2020 to Rs2.94 billion in 2021, a jump of 79.5%.
Similarly, the administrative expenses rose 38.5% to Rs2.48 billion. The enterprise had paid Rs1.79 billion under the same head in 2020.
The company’s finance cost dropped 72.3% as it nosedived from Rs2.66 billion in 2020 to Rs737 million in 2021.
Other income surged 215.5% to Rs2.22 billion during the year under review. The company had received Rs704.4 million under the same head in 2020.
“Other income increased on the back of increased advances from customers, which generated higher interest income for the company,” the analyst said.
During 2021, the company booked effective taxation at 29%.
During the day, the firm’s stock price gained Rs7.22 to close at Rs210.2 with 316,454 shares changing hands at the Pakistan Stock Exchange.
Published in The Express Tribune, March 23rd, 2022.
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