Pak Suzuki Motor Company – Bottom-line turns red

Pak Suzuki Motor Company Limited (PSMC) announced its financial result for 3QCY22 whereby the company posted a loss after tax (LAT) of PKR 2,489mn (LPS: PKR 30.25) against a profit after tax (PAT) of PKR 994mn (EPS: PKR 12.07) during 3QCY21, mainly due to enormous jump (62x YoY) in the finance cost along with volumetric decline. This took the loss in 9MCY22 to PKR 2,507mn (LPS: PKR 30.46) vs. a PAT of PKR 2,190mn (EPS: PKR 26.62) during 9MCY21.

Result Highlights

· Net sales shrunk by 41% YoY to PKR 29.8bn, mainly due to lower volumetric sales amid slowdown in the demand on account of high cost of auto financing and higher car prices. In addition, the PSMC plant was shut down in the month of Aug’22 and Sep’22 due to lower availability of the raw material on the back of SBP’s restrictive measures.

· Gross margins arrived at 5.24% during 3QCY22, stagnant over last year, as higher car prices and significant reduction in steel prices offset the impact of volumetric decline and PKR depreciation.

· Other income rose by 152% compared to SPLY, majorly due to higher interest income on cash and cash equivalents.

· During 3QCY22, finance cost increased by 62x YoY to PKR 4.8bn, attributable to markup being paid on account of late deliveries of vehicles and/or booking of exchange losses.

· The company booked effective taxation at 28% in 3QCY22 vis-à-vis 29% in SPLY.

Courtesy- AHL Research

 

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