Pak Suzuki Reports 8th Consecutive Quarterly Loss

Pak Suzuki, the largest auto assembler in Pakistan suffered from yet another quarterly loss which is their 8th in a row. However for the quarter ended September 2020, on the back of rupee recovery and decline in interest rate, the company’s loss contracted by 88.2% to Rs 136.4 million compared to a loss of Rs 1.16 billion in the same quarter of previous year.

Related: Pak Suzuki Suffers from Worst Quarterly Loss

According to the notice sent to Pakistan Stock Exchange, the company’s loss per share (LPS) came in at Rs 1.66 in the 3rd quarter of this calendar year against Rs 14.11 in the corresponding period of previous year. During the  quarter under review, the company registered sales of Rs 22.6 billion, which is 11.8% less compared to Rs 25.6 billion in the same quarter of last year.

As for 9 months of this calendar year, Pak Suzuki reported losses of Rs 2.6 billion (LPS: 31.58) which is only 3.2% lower than the losses incurred during the same period of last year. Due to the lower volumetric sales due to COVID-19 lockdowns as well as higher prices, the sales revenue of the company fell by 45%. On the other hand, the cost of sales fell by 45.6% owing to a decline in overheads per unit.

Related: Are Tables Turning for Pak Suzuki?

Even though Pak Suzuki was operating in a lower interest rate regime, the finance costs surged by 120% during the period owing to higher short-term borrowings made by the company to meet its working capital requirement. The biggest hindrance towards further losses was the presence of tax credits, which totaled Rs 989.6 million that is 8.2% lower than the same period of last year.

Consolidated Financial Results for the nine months ended September 30, 2020 (Rupees’000)
Sep-20 Sep-19 % Change
Net sales 50,082,132 91,065,101 -45.0%
Cost of goods sold (48,955,839) (89,924,783) -45.6%
Gross profit/(loss) 1,126,293 1,140,318 -1.2%
Distribution and marketing expense (1,009,238) (2,142,356) -52.9%
Administrative expenses (1,578,366) (1,826,049) -13.6%
(Provision)/reversal of impairment losses (13,696) 9,192 -249.0%
Other income 319,250 147,741 116.1%
Share of loss of equity accounted investee (33,391) (2,591) 1188.7%
Finance cost (2,399,352) (1,090,271) 120.1%
Profit before taxation (3,588,500) (3,764,016) -4.7%
Taxation 989,640 1,077,466 -8.2%
Profit after taxation (2,598,860) (2,686,550) -3.3%
Earnings per share -31.58 -32.64 -3.2%

Source: MettisGlobal

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