Corporate results: Indus Motor’s earnings up 28%

Net profit of Rs1.1b in 1QFY15, production increases 22%.

KARACHI: Indus Motor Company (IMC) has reported a net profit of Rs1.1 billion for the first quarter of financial year 2014-15, up 28% from Rs0.9 billion achieved during the corresponding period the previous year.

The company’s sales revenue from Completely Knocked Down (CKD), Completely Built Units (CBU) and spare parts business grew 21% to Rs17.3 billion, compared to Rs14.3 billion achieved for the same period in 2013-14.

The combined sale of Toyota and Daihatsu brand CKD and CBU products grew 17% to 9,975 units as compared to 8,537 units sold during the corresponding period in FY14.

The company’s production of Passenger Cars (PCs) and Light Commercial Vehicles (LCVs) for the quarter was up 22% to 9,998 units compared to 8,173 units produced in the same period last year. The reversal of 10% Federal Excise Duty (FED) on the Fortuner SUV imposed in 2013 also contributed to the volume increase and helped increase the company’s combined market share from 26% to 31%.

IMC CEO Parvez Ghias said the profit was mainly on account of higher sales, increase in treasury income and tighter control on fixed costs. “Strong demand for the new generation Corolla, launched in July, enabled the company to outperform the industry,” he said. “The countrywide response to new generation Corolla has been overwhelming.”

The  industry  overall  demand  for  PCs and LCVs  in  the  country  declined  3% to 31,899 units compared to 32,841 units  sold  during  the same period last year.

“The stagnant state of the economy and  imported  used cars are continuing to hurt the industry and more needs to be done by way of enhancement of concessionary duties and low valuations to safeguard major investments of Original Equipment Manufacturers and parts suppliers,” he added.

He pinned hopes on the new auto policy, expecting that the government would support the local industry.

“The menace of power shortages, poor governance and law and order is eroding the country’s competitive advantage. It is essential that these issues should be tangibly addressed on priority to restore investor confidence and achieve efficiency,” he concluded.

Published in The Express Tribune, October 25^th, 2014.

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