LOADS Ltd. (LOADS) held its corporate briefing today to discuss its FY24 financial results and future outlook. The following are the key highlights:
- The company posted a topline of PkR4.4bn in FY24 compared to PkR4.5bn in FY23, a slight decline of 4%YoY due to lower sales volume amid a slowdown in the auto industry.
- Moreover, the company’s earnings clocked in at PkR287mn (EPS: PkR2.65) in FY24, compared to a loss of PkR1.7bn (LPS: Pk5.339) in FY23 due to negotiations with OEMs increasing pricing.
- Additionally, earnings for 1QFY25 were PkR25mn (EPS: PkR0.31), compared to a loss of PkR190mn (LPS: 0.51) in SPLY.
- Gross margins increased to 26% due to price revisions for sheet metal and exhaust systems.
- Exhaust systems comprised 59% of the total sales mix, followed by sheet metal at 38%, and radiators at 3%.
- Regarding sales contribution, Suzuki led with 56%, followed by Indus at 24%, Honda at 14%, and the aftermarket segment at 1%.
- Management expects volumes to increase going forward, driven by declining auto financing rates and a stable currency, which are anticipated to boost the auto sector. Moreover, management anticipates sales will reach the PKR7bn mark for FY25.
- Management stated that major OEMs are already onboard, with others currently in the negotiation phase for onboarding. However, many new OEMs benefit from duty concessions under the AIDEP, which expires in June ’25. This will lead more OEMs to pursue localization, expanding their client base.
- Due to financial constraints, they could not focus on the aftermarket segment. However, they plan to shift their focus to this segment moving forward.
- Regarding the alloy-wheel plant, management confirmed that the Hi-Tech plant is 90% complete. However, the company plans to sell the unit and has already signed an agreement with BOP. Management expects the deal to be finalized within three to six months.
- Management stated that they intend to maintain a minimum of two months of inventory, although this has been difficult to achieve due to challenges in working capital management.
- The script is not in our formal coverage.
Courtesy – AKD Research
