Pak Suzuki profit increased by 207%

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Pak Suzuki profitPakistan Suzuki Motor Company (PSMC) sent a notification to Pakistan Stock Exchange (PSX), Pakistan’s largest car makers Pak Suzuki profit increased with a net profit of Rs5.8 billion or Rs70.9 earnings per share in the year ending, December 2015 that is up to 207% as compared to Rs1.9 billion or an earning per shares of Rs23.4 in the corresponding year.

The company posted a profit of Rs1.8 billion, earning per share of Rs21.7, an increase of 479% from Rs311 million, earning per share of Rs3.8 at the same time in the last quarter of 2014.

A final cash dividend of Rs15 per share was also in the result.

The KSE-100 Index closed at 32,623, down 115 points on Tuesday, while the share price of Pak Suzuki ended at Rs431.33, down 3%.

Topline securities said that the report was below the expectations.

During 2015, revenues of the company improved substantially by 58% year-on-year (YoY) while gross margins improved by 579 basis points (bps) to 13.6% from 7.8% during 2014. Revenue grew by 86% year-on-year to amount to Rs23.5 billion in the fourth quarter of fiscal year 2015-16 (4Q2015) as company sold 36,712 units in the fourth quarter (+97% YoY). The company sold 133,660 units in 2015, up 72% YoY.

The report explained that the increase volume in the Punjab taxi scheme in provincial budget 2015 contributed to the profits although they offered a discount to Punjab as well.

Gross profit improved substantially to Rs3.2 billion (+271% YoY) in 4Q2015 while gross margins rose by 677 bps to 13.6% year on year. This happened due to 22% YoY fall in international steel prices during the fourth quarter of 2015 and favourable exchange rate movement as the dollar and rupee appreciated against Japanese yen by 5.3% YoY and 2.4% YoY, respectively.

Other income grew by 348% YoY to Rs318 million in the fourth quarter of 2015 as the company earned interest on advances received from customers owing to strong car demand.

Distribution expenses increased to Rs445 million (+184% YoY) led by increased sales.

On quarter-on-quarter (QoQ) basis, revenue of the company posted an increase of 11% from Rs21.2 billion in third quarter of fiscal year 2015-16 (3Q2015) due to 8.7% QoQ volumetric growth.

However, gross margins declined by 229 bps from 15.9% in 3Q2015. They attributed the decline to 1% QoQ appreciation of yen against the dollar and higher sales of taxi units (at discounted price) during the quarter.

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