Pakistan Suzuki Reported Biggest Loss of Decade

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For the quarter ending on 31st March 2019, Pakistan Suzuki Motors Company (PSCL) has reported a loss of Rs.980 million. Last year in the same quarter Rs.904 million was reported as profit. Loss is considered the largest in the last 10 years.

Despite, drop in the year to year volume, the revenues of a company increase by 9.3% in the same quarter last year due to an increase in the average price of products.

Gross profit faced a setback in the face of increasing the cost of sales that rose from Rs.28.89 billion last year to Rs.33.32 billion this year an increase of 15.33%.

The impact of the cost incurred by the company was passed on to consumers and rupee devaluation was another reason that fueled an increase in prices of the range of product and services offered.

Sales of Mehran declined by 24% YoY as it is being replaced by newly 660cc. sales of motorcycles increased to 6009 units compared to 5529 units last year in the same period.

Increase in financing cost as a result of borrowings and rise in interest rate also put the options in gearing risk mode. Customers deposits have decreased and the company is relying on finance by means of borrowing to meet requirements of working capital. Finance cost increase by 345.6% i.e. Rs.326 million compared to Rs.73.34 million last year.

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