Pak Suzuki Motor Company surprisingly reported a net profit of Rs3.24 billion for the second quarter ended June 30, 2023, which soared by almost eightfold compared to earnings of around Rs443 million in the same three months of last year.
The company booked notable net earnings mainly due to an income of Rs2.86 billion in the form of reversal of finance cost in the April-June quarter compared to an outflow of slightly over Rs800 million in the corresponding quarter last year.
The company’s other income, however, dropped to almost Rs774 million compared to Rs1.04 billion in the previous year.
Its sales decreased about three times to Rs21.34 billion due to a significant decline in demand for fourwheelers amid exorbitant increase in the cost of car financing and rupee devaluation. Sales stood close to Rs65 billion in the same quarter of last year.
The net income translated into earnings per share of Rs39.36 in the quarter under review compared to Rs5.38 in the same quarter of previous year.
Cumulatively, in the first half (Jan-Jun) of 2023, the company booked a net loss of Rs9.68 billion (loss per share of Rs117.58) compared to Rs17.24 million (loss per share of Rs0.21) in the corresponding period of last year.
The company, in its financial statement for January-March 2023, said sales volumes were adversely impacted from the late half of 2022, primarily due to the restrictions imposed by the State Bank of Pakistan (SBP) on the import of completely knocked down (CKD) kits of vehicles.
The import restrictions have hindered production in 2023 as well and OEMs (original equipment manufacturers/car assemblers) are forced to opt for “non-production days”.
During the period (January-March 2023), the sales volume of the auto industry for cars and light commercial vehicles was recorded at 26,289 units compared to 69,405 units in the corresponding period of last year, registering a massive decline of 62%.
Sales volume of the company during the January-March 2023 quarter declined by 74% to 9,553 units from 36,753 units.
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