Suzuki suffers Rs9.6bn half-year loss. The largest automaker in the country, Pak Suzuki Motor Company Limited, recorded a Rs9.68 billion net loss to the Pakistan Stock Exchange for the fiscal year that ended on June 30, 2023.
Following import restrictions and weak demand, the company’s sales plummeted, and its losses, as revealed in the statement provided to PSE, increased dramatically from the loss of Rs17.238 million previous year.
Investors in the automaker also missed a payout for the aforementioned time period.
Following a pause in operations during the aforementioned period due to inventory shortages, the company’s sales dropped.
From January to June of 2022, the loss per share (LPS) was Re0.21. This year, the LPS was Rs117.58.
Also read: How to save Rs100,000 on purchase of Suzuki WagonR in August?
As Suzuki suffers Rs9.6bn half-year loss, according to Pak Suzuki, the company’s sales for the year fell to Rs43.182 billion from Rs112.624 billion the year before.
However, the cost of sales remained constant at Rs39.037 billion after increasing to Rs108.415 billion in the same period of last year. Losses soared as finance charges jumped to Rs10.141 billion from Rs1.842 billion previous year.
The company reported a profit of Rs3.238 billion for the three months that ended on June 30 compared to Rs442.989 million for the same period previous year. In comparison to previous year’s profits per share (EPS) of Rs5.38, the quarter’s EPS came in at Rs39.36.
The second quarter performance, according to analysts, exceeded street expectations due to the greater gross margin brought on by several automobile price increases throughout the period and the finance income of Rs2.6 billion, which was driven by currency gains due to the drop in the JPY/PKR parity.
Due to decreased volumetric sales as a result of raw material supply shocks brought on by import restrictions and sluggish demand, the company reported revenue of Rs21.3 billion, down 67% year over year and 2% quarter over quarter.
In 2QCY23, the company reported a gross profit margin of 10%, up from 4% in the corresponding quarter of the previous year.
The increase is related to several increases in car prices in 1HCY23. Due to a fall in short-term investment as a result of a decrease in client advances, the company reported other income of Rs. 774 million in 2QCY23, down 25% from the prior year.
Compared to the finance cost of Rs811 million during the same period previous year, PSMC reported a finance income of Rs2.6 billion in 2QCY23.
This is attributable to gains in foreign exchange brought on by the weakening of the Japanese yen.
The nation’s auto industry is particularly struggling economically since it cannot obtain the Letters of Credit (LCs) required for imports.
The sector is dealing with the LC issue in addition to decreased demand brought on by increasing pricing and historically high loan rates. A declining rupee is also not helpful.
According to information provided by the Pakistan Automotive Manufacturers Association (PAMA), the first month of the fiscal year 2023–24 saw a staggering 57% year-over-year (YoY) decline in car sales.
Only 5,092 units were collectively sold by the PAMA-registered automakers in July. The results show that the monthly (MoM) decline was 16%.
