Corporate results:Pak Suzuki posts healthy profit

Buoyed by rupee appreciation, EPS recorded at Rs5.38.

Our Correspondent April 25, 2014

Pak Suzuki was the last company to reduce car prices after the sharp appreciation of the rupee against the dollar recently. PHOTO: FILE

KARACHI: Pak Suzuki Motor Company (PSMC) posted a net profit of Rs443 million in the first quarter ended March 31, up 22.4% compared to Rs362 million for the same period last year.

Its earnings per share (EPS) were recorded at Rs5.38 against Rs4.40 for the corresponding period in the previous year.

Pakistan rupee appreciation against the dollar in recent weeks has strongly supported the company’s earnings.

The company posted handsome earnings despite the decline in volumes by 5.1% year-on-year (YoY) from 21,104 units in the first quarter of 2013 (1Q2013) to 20,022 units in 1Q2014.

Moreover, late revision in car prices has also bode well for the company which resulted into 2%YoY lower cost of sales to Rs12.7 billion.

Pak Suzuki was the last company (after Indus Motor and Atlas Honda Cars) to reduce car prices after the sharp appreciation of the rupee against the dollar recently.

Consequently, gross margins increased to 7.1% in 1Q2014 from 4.7% in 1Q2013. “The result is in line with our estimates. We expect further improvement in margins going forward as major impact of Pakistan rupee appreciation against the dollar will further reduce costs,” Topline securities reported on Friday.

The finance cost of the company has also gone down substantially to Rs2.7 million in 1Q2014 from Rs35.7 million in the same period of last year.

On quarter-on-quarter basis, revenues of the company grew by 13.1% to Rs13.7 billion primarily due to new year model phenomenon (customers prefer buying new models in January instead of December) as witnessed by volumetric growth of 14.2% from 17,526 units in 4Q2013.

The earnings of the company has increased by almost 38% to Rs443 million primarily due to decrease in distribution and administrative cost by 19.7% and 8.5% respectively.

Published in The Express Tribune, April 26^th, 2014.

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