Pakistan’s largest car manufacturer in terms of market share, Pak Suzuki Motor Company (PSMC) has recorded a mammoth Rs1.99 billion profit for the half-year which ended on 30th June 2017. Subsequently, Pak Suzuki registered 38% rise year-on-year in its profit.
As per the company notice sent to Pakistan Stock Exchange (PSX), the Earning Per Share (EPS) also boosted from Rs17.44 (same period last year) to Rs24.20. The profit for Pak Suzuki in the preceding year during the same tenure was Rs1.43 billion.
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The earnings in the second quarter of 2017 was Rs685 million as revealed by Pak Suzuki. Consequently, the revenues increased by 21% year-on-year for the same period. The share price of Pak Suzuki was down by Rs3.92 on Tuesday as it closed at Rs646.74.
In its report, Topline Securities commented:
“The results of Pak Suzuki were below market expectations”
Sale of Wagon-R and Cultus helped in boosting revenues
The higher profit volumes of Pak Suzuki were supported by the sales of new Cultus (introduced in April 2017) and Wagon-R. According to the company, it sold out 29,301 units during the second quarter of 2017. The sales got up by 8% year-on-year during the same period. The profit margin was augmented since there was a 13% increases in the prices of the cars. The price of Wagon-R (VXL Variant) was is Rs1,250,000 and it was increased by Rs196,000.
Out of 29,301 units which were sold during the second quarter, Wagon-R remained the most significant variant of Pak Suzuki and the company sold out 5,076 units which is up by 78% year-on-year.
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The gross margins, however, declined fractionally to 8% during the second quarter this year. In addition, the total revenues were also deteriorated by 4%. The drop in margins was registered at 3% year-on-year as Japanese Yen got stronger and 11% increase was also observed in the prices of steel.
The selling and administration expenses were increased by 24% and 11% to Rs675 million and Rs543 million respectively. As a result, it ensued upsurge in gross profit.