Pak Suzuki Motors is one of the largest automotive industry in Pakistan that provide their vehicles in Pakistan from many years and play a large rule to manufacturing vehicles in the country announced their Financial Result of the half-year of 2019 the period ended 30th June.
Recently the prices of vehicles increase in Pakistan because of the FED imposed by the government and the other reason is a devaluation of a currency against the dollar and this is badly affecting the sale of vehicles in the country Pak Suzuki also mention that the bear a loss of Rs. 1.5 billion in the first half of the year 2019. As compared to the previous year in the same period the company records its profit was Rs. 1.29 billion.
According to the details, the net sales recorded in the first half-year were Rs. 65.42% billion and in the lase year same periods the net sale was 62.39% it means the net sales up by 4.86%, the product prices are increased, the despite volumes dropping by 11.26%.
The cost of sales increased by 10.32% to Rs. 64.05% billion as compared to the previous first half-year the cost of sales was Rs. 58.06 billion and its effect the gross profit and the gross profit of this financial year were dropped by Rs. 68.58% to Rs. 1.37 billion compared to Rs. 4.36 billion and the reason behind the cost of sales increased is just because of the devaluation of the currency.
| 1st Half-year CY 2019-2020 Volumes | |||
| Models | HYCY19-20 | HYCY18-19 | Difference |
| Swift | 2116 | 2775 | -23.75% |
| Cultus | 12006 | 10982 | 9.32% |
| Wagon R | 16533 | 15065 | 9.74% |
| Mehran | 15155 | 24002 | -36.86% |
| Bolan | 9497 | 11254 | -15.61% |
| Alto | 1685 | – | – |
| Ravi | 9428 | 10768 | -12.44% |
| Total | 66420 | 74846 | -11.26% |
In the first half-year of 2019, the sales volume decreased by 11.26%. the company discontinued the production Suzuki Mehran and replaced it with Suzuki Alto and in this period company sold 1685 units. On the other side, the sale of Suzuki Swift down by 23.75% but the sales of Cultus and Wagon R increased by 9.32% and 9.74% during the first half-year 2019.
In this report, the gross profit margin settles at 2% in FHY 2019 and it’s down as compared to the previous year same periods the percentage was 7%. The reason is the cost of raw material increase because of the devaluation of the currency.
The finance cost of Pak Suzuki increases to Rs. 706.42 million against 92.86 million because of the interest rate increased. Pak Suzuki other income down just Rs. 97 million.
As compared to the earning per share Rs. 15.77 company bear a loss per share Rs. 18.53. The positive side is the tax reversal of Rs. 600 million.
2nd Quarter Result:
Suman Rohra an analyst at FlatRock associates said that the Pak Suzuki reported a loss during the Q2 2019 554.61 million after-tax translating into LPS of Rs. 6.62/share, decrease by 238%/YoY as compared to the same period at last year with the profit was Rs. 393 million.
The sales of the company drop by 10%/ QoQ to clock in at Rs. 31.02 billion because of the different price hike, taxes, and devaluation of the currency.
The overall loss company bear at this year is maybe lower than last year but keep in mind the company’s loss before tax clocked in at Rs. 1.59 billion.
