Pak Suzuki's profitability jeopardized by increased operating expenses

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MG News | October 23, 2018 at 01:29 PM GMT+05:00

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October 23, 2018 (MLN): The profits for Pak Suzuki Motors Company Limited have slithered by Rs1.7 billion, exhibiting a decline of 55.04% as per the latest notification issued by the company. The factors contributing to the plunge in profits included increased operating expenses of the company.

The increase in top-line earnings by Rs16 billion was outweighed by more than equal increase in Cost of sales by Rs17 billion, which led to an 18.05% drop in gross profits.

Moreover, the operating expenses including Distribution cost and Administrative cost exhibited hikes of 5.24% and 47.96% respectively, along with a decrease in Non-core income by 27.82% which further worsened the profitability of the company.

Even though the finance cost and taxation fell by 10.93% and 20.33% respectively, the overall impact on the ultimate profits eventually displayed a drop of 55.04%

The Earnings per share of the company also dropped by 55.04% for the nine months period ended September 30th 2018.

Profit and loss account for the nine months ended September 30th 2018 (Rupees’000)

 

Sep-18

Sep-17

% Change

Turnover

89,018,472

72,802,282

22.27%

Cost of sales

-82,962,438

-65,411,921

26.83%

Gross Profit

6,056,034

7,390,361

-18.05%

Distribution costs

-2,073,639

-1,970,315

5.24%

Administrative expenses

-1,660,122

-1,122,011

47.96%

Finance costs

-125,147

-140,504

-10.93%

Other income

479,310

664,029

-27.82%

Workers' profit participation fund

-133,730

-240,309

-44.35%

Workers' welfare fund

-50,818

-92,048

-44.79%

Profit from operations

2491888

4489203

-44.49%

Share of loss of equity accounted investee

-1839

-14651

-87.45%

Profit before taxation

2490049

4474552

-44.35%

Taxation

-1097610

-1377616

-20.33%

Net Profit for the period after Tax

1392439

3096936

-55.04%

Earnings per share

16.92

37.63

-55.04

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