The market share of PSMC improved slightly to 55.4% in CY22

Pak Suzuki Company Limited (PSMC) held its corporate briefing session on 17th May’23 to discuss the financial results of CY22/1QCY23 and the Future.

Outlook:

* To recall, Pak Suzuki Company Limited announced its financial results for CY22/1QCY23, where the company posted LAT of PkR6.34bn (LPS: PkR77/sh) and PkR12.9bn (LPS: PkR156.9/sh) for CY22/1QCY23, respectively.

* The market share of PSMC improved slightly to 55.4% in CY22 from 51.7% in SPLY. The company sold 125,947 units in CY22 vs 122,799 units during SPLY. Meanwhile, the company’s market share in 1QCY23 declined significantly to 36.3% vs 52.8% in SPLY.

* The company recently incurred significant finance costs of ~PkR12bn in 1QCY23 majorly due to exchange losses on foreign trade liabilities. For this reason, management expects finance costs to normalize in the coming quarter, however volatile PkR movements may prompt company to incur further losses going forward.

* Assuming exchange rate movements remain volatile, management expects order booking prices would vary significantly from the delivery price.

* The current localization levels stands at 34%/49.44%/60.85%/60.95%/71.23%/66.97% for Swift/Cultus/Wagon-R/Alto/Bolan/Ravi, respectively.

* Management commented that import restriction on CKD kits is the leading cause of plant shutdowns, and is a major burden for the sector overall. Company urges the government to permit the imports of Auto sector.

* The continued volatility of PKR against the US Dollar, high interest rates and excessive inflation, coupled with low consumer purchasing power, may continue to negatively impact the auto sector volumes going forward.

Courtesy- AKD Research

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