Pak Suzuki Motors posts Rs 1.5 billion loss

Karachi, July 24, 2019: Pak Suzuki Motor Company has posted a huge loss of Rs 1.535 billion in the first half of this calendar year (CY19).

According to Atif Habib Research, Suzuki Motor Company Limited (PSMC) announced its 2QCY19 financial result on wednesday where the company declared a loss after tax of PKR 545 million (LPS: PKR 6.62), compared to a profit after tax of PKR 394 million (EPS: PKR 4.78) in 2QCY18 and a loss of PKR 981 million (LPS: PKR 11.92) in 1QCY19.

With this, the loss during 1HCY19 settled at PKR 1,525 million (LPS: PKR 18.53), compared to PKR 1,298 million (EPS: PKR 15.77).

Net sales of the company grew by 1 percent YoY to PKR 31.0 billion in 2QCY19 compared to PKR 30.9 billion in 2QCY18. Despite volumetric decline of 17 percent YoY to 30,433 units vis-à-vis 36,776 units in 2QCY18, the revenue of the company grew on account of an increase in car prices by an average of 15-20 percent.

Margins deteriorated to 1.00 percent, down by 466bps YoY and 225bps QoQ as compared to 5.66 percent in 2QCY18 and 3.25 percent in 1QCY19, respectively. The decline came on account of currency depreciation of 25 percent YoY which eroded margins as the company was unable to pass on the impact of adverse currency movement and higher duties on the imported raw material.

Other income dipped by 75 percent YoY to PKR 53 million due to reduction in bank balances and advances from customers.

Finance costs of the company jumped up by 1,845 percent YoY and 16 percent QoQ to PKR 380 million owed to rise in borrowings to meet working capital requirement.

The company recorded a tax credit of PKR 1.4 billion on investment to introduce the 660cc Alto.