Sazgar Engineering Works Limited (SAZEW) announced its financial result for FY24 today, posting a PAT of PKR 7,936mn (EPS: PKR 131.29) compared to PKR 995mn (EPS: PKR 16.46) in SPLY, up by 8x YoY. During 4QFY24, earnings clocked in at PKR 3,487mn (EPS: PKR 57.69), showcasing a significant jump of 7.4x YoY. A final cash dividend of 12.0/share was announced, bringing the total annual payout to PKR 20.0/share.

Result Highlights       

• Topline during FY24 surged by 3.2x YoY clocking at PKR 57,642mn. This growth was driven by a 3x increase in Haval sales YoY, totaling 5,374 units, and a 1.6x YoY rise in three-wheeler sales to 15,014 units. During 4QFY24, net sales were augmented by 4.1x YoY to settle at PKR 23,058mn, in contrast to PKR 5,581mn in SPLY.
• For FY24, gross margins improved to 27%, up from 14% in the same period last year. This increase was primarily driven by concessionary customs duties and GST on Haval vehicles, coupled with stability in PKR parity. During 4QFY24, gross margins were recorded at 29% compared to 23% in SPLY.
• Other income surged by 27x YoY in FY24 at PKR 832mn due to higher income from cash and cash equivalents. In 4QFY24, the other income arrived at PKR 481mn, augmented by 38x YoY.
• Other expenses rose significantly by 9.8x to PKR 1,000mn, while on a quarterly basis, they went up by 9.4x to PKR 456mn.
• The company booked effective taxation at 39.6% in 4QFY24 vis-à-vis 35.0% in 4QFY23.

Other information

• The company plans to invest PKR 4.5bn in its expansion, financed through internal cash reserves. This investment includes the construction of new warehousing facilities, expansion of the paint shop,  installation of a solar system, and the establishment of manufacturing facilities for the local assembly of new energy vehicles, pending approval from the relevant regulatory authorities.

Courtesy – AHL Research