Karachi, July 24, 2019: The Pak Suzuki Motor Company has recorded a huge loss of 1.535 billion rupees in the first half of this calendar year (CY19).
Pakistan Suzuki Motor Company Limited (PSMC) announced on Wednesday its financial result 2QCY19 according to which the company reported an after-tax loss of 545 million PKR (LPS: 6.62 PKR), compared to a profit after tax of 394 million PKR (EPS : 4.78 PKR) in 2QCY18 and a loss of 981 million PKR (LPS: 11.92 PKR) in 1QCY19.
Thus, the loss in the year 1HCY19 amounted to 1,525 million PKR (LPS: 18.53 PKR), against 1,298 million PKR (BPA: 15.77 PK).
The company’s net sales increased 1% year-over-year to PKR 31.0 billion at 2QCY19, compared to PKR 30.9 billion at 2QCY18. Despite a volumetric drop of 17% year-on-year, to 30,433 units versus 36,776 units at 2QCY18, the company’s turnover has grew on account of an increase in car prices of 15% to 20% on average.
Margins deteriorated to 1.00%, down 466 basis points year-on-year and 225 basis points year-on-year, compared to 5.66% at 2QCY18 and 3.25% at 1QCY19, respectively. This decrease is explained by the depreciation of the currency of 25% over one year, which eroded the margins because the company was not able to pass on the effects of the fluctuation of the exchange rate and the higher duties on the imported raw material.
Other income fell 75% year-on-year to Rs 53 million due to reduced bank balances and customer advances.
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’s financial expenses jumped 1,845% year-over-year and 16% quarter-on-quarter on PKR 380 million, due to an increase in borrowing to meet a working capital requirement.
The company recorded a tax credit of PKR 1.4 billion on the investment to introduce the 660cc Alto.