The Board of Directors of Indus Motor Company (IMC) met on February 24, 2022 to review, evaluate and announce the company’s financial and operating performance for the half year ended December 31, 2021.
The Company’s net sales turnover for the half year ended on December 31, 2021, increased to Rs.135.18 billion, as compared to Rs. 79.65 billion, for the corresponding period last year, while profit after tax have also increased to Rs. 10.18 billion as against Rs. 4.80 billion, achieved in the same period last year. The net profit for the six months have increased mainly due to higher CKD and CBU volumes and increase in other income due to higher fund size on account of increase in customer advances.
The overall market share of IMC in the overall market stood at approximately 20.4% for the half year ended December 31, 2021. Moreover, the combined sales of Locally produced vehicles and Completely Built-up Units (CBU) of the Company increased by 46.5% to 38,632 units against 26,362 units sold in the same period last year. The first half of the fiscal year has experienced an increase in demand mainly due to economic growth, lower auto financing rates and price reduction of vehicles on account of a reduction in Additional Custom Duty (ACD) and Federal Excise Duty (FED) from July 2021.
In comparison with previous quarter ended September 2021, the quarter ended December 31, 2021 has observed an increase in net sales turnover on account of higher CKD and CBU volumes. Despite higher turnover for the quarter, the profit after tax for the current quarter reduced as compared to previous quarter, mainly due to rising input costs as a consequence of depreciation of PKR against USD, higher commodity prices, rising cost of production, etc.
Chief Executive, IMC, Ali Asghar Jamali expressed, “Alhamdolillah, the first half of the fiscal year has been very good which is very uplifting. Government’s favourable policies and tax measures, critical for a conducive environment to operate in, greatly contributed towards the cascading positive impact on revenues. With the ever-present COVID threat continuing to ease and demand skyrocketing, we’ve been able to meet every challenge head-on, meeting the high expectations our customers’ demand of us.”
He added, “We appreciate Government’s initiative to finalise the new Auto policy with the stakeholders and for maintaining the Hybrid Electric Vehicle incentives. We urge the Government to promote consistent policies for long-term economic growth of the auto sector and provide incentives to local vendors for manufacturing of high tech parts and reduce duties and taxes to support the continued momentum of demand in the auto industry. On the whole, this will generate more taxes for the Government and will also create more employment opportunities.”
The continuing increase in commodity prices, freight charges on imports, currency depreciation, etc. and recent increase in FED by Government, may have a negative impact on the sales volume and profitability of the auto sector in upcoming periods.
The Earnings per Share of the company for half year ended on December 31, 2021 is Rs. 129.45 in comparison to Rs. 61.08 reported in the same period last year. The Board of Directors announced a second interim cash dividend of Rs. 30 per share for the half year ended on December 31, 2021.