Pak Suzuki Motor Company recorded a reduction of Rs1.16 billion in the quarter ended September 30, 2019 that arrived on the back of a massive decrease in automobile sales.
The company had submitted a profit of Rs94.8 million in the exact same period of prior year, according to a note delivered to the Pakistan Stock Exchange (PSX) on Friday.
Loss per share stood at Rs14.11 in the Jul-Sept 2019 quarter compared to earnings per share of Rs1.15 at precisely the exact same period of previous year.
The results were in line with market expectations given the deplorable state of the auto sector.
“As was anticipated by many in the current market, Pak Suzuki Motor Company enrolled its fourth largest quarterly loss in a row,” stated Shajar Research in a report.
“The decrease came due to currency depreciation of 21% year-on-year, which eroded margins since the company was not able to pass the effect of adverse currency movement, greater duties on imported raw material and due to change in sales mix from high-margin automobiles to low-margin automobiles,” said an AHL Research report.
Meanwhile, distribution expenses dropped 26.5% to Rs461.2 million in Rs627.7 million from the preceding year, in line with a fall in volumes. The debut of national excise duty slabs for the auto sector and weak rupee, coupled with a slowdown in economic activities, have led to a decline in auto sales.
“Total car sales recorded a decrease of 67% year-on-year in Jul-Sept 2019,” the Shajar Research report added.
Finance price of this firm surged exponentially, jumping 12 occasions to Rs383.8 million from Rs32.3 million due to greater borrowing by the enterprise to meet working capital condition.
Despite the increase in costs to correct the impact of rupee depreciation, the topline of the company registered a decrease due to dip in car sales.
On the other hand, other income dropped 44.6% to Rs49.8 million from the quarter under review, from Rs89.9 million from the preceding year.
“Other income dipped due to decrease in bank accounts and advances from customers,” based on the AHL Research report.
Pak Suzuki’s share price dipped Rs2.54 or 1.66% to Rs150.26 using a turnover of 172,000 shares.
The grade KSE 100-share Index recorded a decrease of 105.02 points, or 0.31%, to settle at 33,657.46.
Pak Suzuki recorded a loss of Rs2.69 billion in nine months ended September 30, 2019 on the back of a huge reduction in automobile sales.
The company had posted a profit of Rs1.39 billion in precisely the exact same period of prior year.
Loss per share stood at Rs32.64 in the period under review when compared with earnings per share of Rs16.92 in the preceding year.