Karachi, March 19, 2021: JS Global expecting that Pak Suzuki Motor Company’s (PSMC) to announce a Loss after Taxation of Rs2.1 billion (LPS: Rs25.36) for the year CY20, compared to a net loss of Rs2.9 billion (LPS: Rs35.49) in CY19.
Pak Suzuki Motor Company’s (PSMC) board meeting to announce CY20 results is scheduled for Monday, 22nd March 2021. However, analysts at JS said that despite the loss in the full year, 4QCY20 is expected to be a return to profitability for the company (after eight quarterly losses in a row), where we expect an EPS of Rs6.21.
Growth in earnings is expected mainly on the back of the likelihood of gross margin expansion by ~190bps QoQ on favourable movement in the PKR/US$ parity, coupled with price increases for their top-selling brand Alto.
Moreover, revenue growth is forecasted at 21 percent QoQ on the back of 17 percent QoQ growth in volumes which will also lend support to the company’s bottom line.
Finally, finance costs are expected to decline by a massive 60 percent QoQ on the back of significant deleveraging by the company during the last quarter. To specify, while short term finances have shrunk to Rs13 billion in 3QCY20 from Rs32 billion by 2QCY20, the outstanding loan balance is almost entirely owed to its parent company at a relatively cheap rate of LIBOR + 0.2 percent, which will positively impact finance costs during the December quarter in our view.
