Here’s how much Pak Suzuki earned in three months

WEB DESK: Pak Suzuki Motor Company Limited (PSMC) has managed to exceed market expectations in the third quarter of 2023, showcasing resilience amidst challenging circumstances.

According to experts, the notable performance can be attributed to higher gross margins, despite facing a 34 per cent decrease in volumetric sales due to increased car prices.

Steady revenues amidst sales challenges

Despite the decrease in sales volumes, PSMC’s revenues for the quarter remained steady when compared year-on-year.

This stability in revenue was complemented by a remarkable 40 per cent increase on a quarter-on-quarter basis.

This rise was bolstered by a 47 per cent surge in car volumes, indicating a potential market shift in consumer preferences.

Pak Suzuki’s financial overview

In the third quarter of 2023, PSMC’s sales amounted to Rs29.9 billion, marking a modest year-on-year increase of 0.38 per cent.

However, the bigger picture reveals a significant challenge faced by the company in the nine months ending September 30.

Sales during this period plummeted by a staggering 48 per cent year-on-year, dropping from Rs142 billion to Rs73 billion.

Despite the sales challenges, PSMC managed to maintain a gross margin of 14.1 per cent for the third quarter of 2023.

However, the nine-month data ending on September 30 paints a different picture, with the gross margin standing at 11.4 per cent.

This indicates the company’s ability to adapt to market dynamics and maintain a reasonable level of profitability.

The financial report also highlighted a decrease in bookings, leading to a 39 per cent year-on-year decline in other income, which amounted to Rs1.6 billion, down from Rs2.6 billion in the previous year.

During the July-September period, other income experienced a 28.5 per cent year-on-year decrease, amounting to Rs761 million.

A significant positive development for PSMC was the turnaround in its finance cost. After impacting the company’s bottom line negatively over the last nine months, the finance cost turned positive in the third quarter of 2023.

PSMC earned a finance income of Rs144.5 million during the quarter under review. This positive change was primarily attributed to exchange rate gains, as reported by Topline Securities.

Delisting from PSX

In another strategic move, Pakistan Suzuki is gearing up to officially delist from Pakistan’s stock market. This decision, coupled with the positive Q3 2023 results, indicates a shift in the company’s approach to market dynamics.

Despite the challenges faced by Pakistan Suzuki Motor Company Limited, the company’s performance in the third quarter of 2023 showcases resilience and adaptability.

The ability to maintain steady revenues amidst a decrease in sales volumes and the positive turnaround in finance costs indicate the company’s commitment to navigating complex market conditions.