Country’s largest car assembler faces Rs9.6bn loss in first half of 2023

KARACHI: Pak Suzuki Motor Company Limited has disclosed a net loss of Rs9.68 billion for the initial half of 2023.

In a statement to the Pakistan Stock Exchange, the company highlighted that its sales experienced a significant decline due to import restrictions and weak demand. As outlined in the statement submitted to PSE, the loss per share (LPS) for this year reached Rs117.58, presenting a significant disparity compared to the Rs0.21 LPS documented between January and June 2022.

The loss per share was recorded at Rs117.58, in sharp contrast to the loss per share (LPS) of Re0.21 registered during the corresponding period in the prior year.

Investors of Pak Suzuki, the company’s manufacturers, also did not receive a dividend for the mentioned period. The company’s revenue for the year dropped to Rs43.182 billion, in contrast to the previous year’s figure of Rs112.624 billion. Meanwhile, the cost of sales remained stable at Rs39.037 billion, consistent with the Rs108.415 billion reported in the same period last year. An increase in finance costs to Rs10.141 billion from Rs1.842 billion in the previous year contributed to the escalated losses.

Analysts observed that the results for the second quarter surpassed predictions, driven by improved gross margins resulting from increases in car prices. Additionally, the company benefited from a finance income of Rs2.6 billion due to favourable exchange rate fluctuations.

During this period, the company experienced a 67 per cent year-on-year decrease and a 2 per cent quarter-on-quarter drop in revenue. This decline was attributed to lower sales volume triggered by disruptions in the supply of raw materials and reduced demand. Despite these challenges, the company managed to achieve a noteworthy 10 per cent gross profit margin in the second quarter of CY23, marking a significant rise from the 4 per cent of the previous year.