KARACHI: Indus Motor Company’s net profit jumped 284 per cent to Rs2.2b because of higher sales, meeting analyst expectations for the first nine months of the fiscal year 2010.
Sales of Toyota Corolla have been the key driver of the IMC growth. They grew 67 per cent in nine months to Rs40 million compared to sales of Rs24 million recorded in the same period last year, according to a statement released on Tuesday. The company’s higher cash balances boosted other income by more than 200 per cent to Rs1.3 billion as a result of advance bookings by customers. Earnings per share increased to Rs27.68, up 284 per cent year-on-year.
Gross margins rose to 7.5 per cent in the nine months of fiscal year 2010, up from 4.6 per cent in the same period last year. Persistent yen-rupee volatility and rise in steel prices remain a major cost concern for the company because Indus works in collaboration with the parent Toyota Corporation of Japan. Finance cost soared to Rs107 million in the nine-month period against Rs31 million recorded last year. IMC’s shares fell by Rs6.99 on Tuesday to close at Rs232.05 on the Karachi Stock Exchange. It is the first company in the auto sector to announce its third-quarter results. The stock has increased Rs124.01 in the last 12 months. Sales of locally-assembled automobiles rose by 80 per cent during March compared to the same month in the previous year.
Corolla sales had also been the single biggest factor in February’s growth figures, which had been similarly positive. These lead analysts to fear that the recovery in the automobile market may be confined to the upper end of the consumer spectrum. The company posted a Rs809 million profit in the three months ended March, which was a 200 per cent increase against the same period last year. The company is a joint venture between the House of Habib, Toyota Motor Corporation and Toyota Tsusho Corporation. IMC’s product line includes six variants of Toyota Corolla, Toyota Hilux Single Cabin 4x2 and four versions of Daihatsu Cuore.
It also has a range of imported vehicles. IMC plans to manufacture 4,315 units of Toyota Corolla in April followed by 4,590 units in May and 4,700 units in June. However, the 2010-11 budget in June may result in a change in the auto production plan from July onwards depending on budgetary decisions.