Pak Suzuki posts whopping increase in profit

Earnings up 216%, touch Rs1.82b during first quarter of FY16

KARACHI: Pak Suzuki Motor Company on Thursday announced better than expected profit of Rs1.82 billion for the third quarter ended September 30, 2015, up by a massive 216% from Rs576 million in the same period last year.

Earnings per share (EPS) improved to Rs22.1 compared to an EPS of Rs7.0 in the period under review. Topline Securities, in its report on Thursday, said the result was above market consensus estimates.

Pak Suzuki’s revenue grew by 78% year-on-year (YoY) to Rs21.2 billion in third quarter of 2015 (3Q2015) as the company sold 33,770 units in the third quarter (+98% YoY).

“We attribute this increase in volumes to the taxi scheme launched by the Punjab government in the provincial budget of fiscal year 2015,” the report added.

Gross profit improved substantially to Rs3.4 billion (+207% YoY) in 3Q2015 while gross margins rose by 670 basis points (bps) to 15.9% YoY.

“We mark this improvement to the fall in international steel prices and favorable exchange rate movement as the dollar and Pak rupee appreciated against Japanese yen by 16.6% YoY and 12.4% YoY, respectively.”

Other income grew by 119% YoY in 3Q2015, as the company earned interest on advances received from customers owing to a strong car demand.

Indus Motor’s profit up 159%

Meanwhile, Pakistan’s other auto sector company, Indus Motor, local affiliate of Toyota Japan, announced a profit-after-tax of Rs2.93 billion for the first quarter (Jul-Sep) of fiscal year 2015-16 (FY16), up 159% from Rs1.13 billion for the same period last year. The company’s production of passenger cars and light commercial vehicles (LCV) for the quarter stood at 14,922 units, up 49% compared to 9,998 units. Combined sales, comprising completely knocked-down (CKD) and completely built unit (CBU), grew by 49.8% at 14,948 units compared to 9,975 units in the corresponding period last year.

Overall sales revenue from CKD, CBU and spare parts business was recorded at Rs24.8 billion compared to Rs17.3 billion in the corresponding period last year. Based on the results, the Board of Directors announced an interim cash dividend of Rs20 per share.

The overall stimulus in the economy was spurred by government spending on infrastructure development and schemes such as the Punjab Government’s ‘Apna Rozgar’ which further contributed towards economic growth, according to IMC Chief Executive Officer Parvez Ghias.

Published in The Express Tribune, October 30^th, 2015.

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