Business

Corporate results: Pak Suzuki registers profit of Rs1.93 billion

Up 4% in CY14 on back of higher volumetric sales.

Our Correspondent March 19, 2015

Earnings per share (EPS) jumped to Rs23.35 in CY14 compared to an EPS of Rs22.37 in CY13. The result was accompanied by a final cash dividend of Rs5 per share for CY14.

KARACHI:

Pak Suzuki – the country’s largest carmaker – has posted a net profit of Rs1.93 billion in calendar year 2014 (CY14), up 4% compared to Rs1.85 billion CY13.

Earnings per share (EPS) jumped to Rs23.35 in CY14 compared to an EPS of Rs22.37 in CY13. The result was accompanied by a final cash dividend of Rs5 per share for CY14.

The increase in profits was primarily driven by 140 basis points expansion in margins while the company sales also increased by 5%, backed by an increase in volumetric sales, BMA Research said on Wednesday.

However, the profits earned by the company were lower than market expectations.

“The earnings remained lower than our expectation, as the entity likely booked inventory losses owing to sharp decline in steel prices,” stated Sherman Securities in its analysis. Global Research even predicted on Tuesday that Pak Suzuki would report a profit of Rs2.24 billion, up 21% compared to CY13.

In the fourth quarter (Oct-Dec) of CY14 alone, the company posted an EPS of Rs3.8 compared to an EPS of Rs4.51 in third quarter of CY14, down 16%.

Analysts say the Apna Rozgar Scheme – a taxi scheme by the government of Punjab – is expected to improve the company’s earnings going forward.

Higher earnings are primarily due to improved gross margin of 8% against 6% last year. During the period, the gross margin increased due to a reduction in cost of production owing to favourable movement of the Pakistani rupee against the Japanese yen – the rupee appreciating by an average 9% during the year.

On the other hand, 41% decline in other income to Rs510 million slightly restricted the impact of a better margin. The decline in other income is due to a higher base affect, as last year, Pak Suzuki booked a one-time gain on disposal of an old motorcycle plant amounting to Rs274 million – with an EPS impact of Rs2.

Published in The Express Tribune, March 19^th, 2015.

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COMMENTS (2)

Omar | 9 years ago | Reply I Agree with Ibby. Suzuki Pakistan is part of auto mafia that is depriving Pakistan of quality cars. Its high time we let more of foreign companies into Pakistani market, that's the only way to break this monopoly.

Ibby | 9 years ago | Reply Almost $20 Million profit by selling 30 years old model line up, and selling less than 50,000 Suzuki cars. Japanese have trapped the poor Pakistanis really well. Government should open up this auto assembler mafia, increase the competition just like in the motorbike industry which also had only 3 assemblers who were doing the same exact thing to consumers and now after opening up Motorbike manufacturing and assembly there are 69 Motorbike assemblers and manufacturers, mostly Chinese, but consumer are buying motorbikes at international price. Same can be done with car industry, which today pays 2 to 3 times more than international price for 30 year old obsolete models not sold anywhere else but Pakistan by these Japanese and local auto mafia.

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