Pak Suzuki announces brief closure of plants

Cites shortage of inventory for suspension of production

KARACHI:

Pak Suzuki Motor Company (PSMC) has announced temporary shutdown of its automobile and motorbike plants, citing shortage of inventory.

“Due to shortage of inventory level, the management of the company has decided to shut down automobile plant from October 30 to November 3 and motorcycle plant from November 1 to November 3,” the company said in its notice sent to the Pakistan Stock Exchange (PSX) on Tuesday.

This year, the automaker has closed its plants at regular intervals owing to scarcity of raw material caused by government’s restrictions on opening Letters of Credit for imports. The government put curbs on imports as its foreign exchange reserves fell steadily to only around one month of import cover.

Last week, Pak Suzuki Motor also announced that its board of directors had approved voluntary delisting of the company from the Pakistan Stock Exchange (PSX) as persistent losses and no dividends for shareholders left no reason to stay at the bourse.

In a notification sent to the PSX, the company said it would soon submit a formula to determine the price for share buyback from the general public. “PSX and the Securities and Exchange Commission of Pakistan (SECP) may guide in this regard.”

Pak Suzuki reported a net profit of Rs3.80 billion for the third quarter ended September 30, 2023, which reflected a turnaround from the net loss of Rs2.59 billion reported for the same quarter of last year.

The profit or loss account suggested that increase in car prices and a surge in sales volume helped the company to return to profit by offsetting the impact of rupee depreciation and rise in prices of imported parts.

In the first nine months (Jan-Sept) of 2023, however, the company posted a net loss of Rs5.87 billion, which was more than double the loss of Rs2.51 billion recorded in the same period of last year.

Published in The Express Tribune, October 25^th, 2023.

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