Pak Suzuki, the largest auto assembler of Pakistan posted a significant profit after tax of Rs 1 billion in the fourth quarter of 2020 (October to December) compared to a loss of Rs 234 million in the final quarter of 2019.
This is the first time after two years and 8 consecutive quarterly losses, that Pak Suzuki has been able to report a profit. The healthy results came on back of a surge in gross margins, 70% reduced administrative expenses, 451% increase in other income and 73% reduction in finance costs due to huge deleveraging of its balance sheet.
Despite a drastic drop in sales, as Pak Suzuki sold 59,052 units in the pandemic-struck year 2020 against 111,543 units sold in 2019, its gross profit came in at Rs 3.3 billion last year, which was 66% higher than the Rs 1.98 billion recorded in 2019.
The company’s income soared 216.57% on a year-on-year basis recorded at Rs 704.4 million in 2020 compared to Rs 222.5 million in 2019. According to analysts, other income increased due to exchange gains as Rupee has considerably appreciated against the Dollar with car prices yet to come down, as well as surge in advances from the customers.