PSMC records a 61% increase in losses during 1HCY20

August 19, 2020: Pak Suzuki Motor Company (PSMC) has once again found itself in the red zone, as the company has incurred losses of Rs. 2.4 billion (LPS: 29.92) for the half-year ended June 30, 2020, i.e. around 61% higher than the losses recorded during the same period of last year.

The company suffered a 58% decline in topline revenue on the back of extremely depressing volumetric sale numbers observed during and after the imposition of lockdown, wherein the company had to shut down operations for almost 75 days. The weak economic situation and the worsening business environment also pushed the revenue lower for PSMC.

The finance costs depicted a 1.74x growth owing to the excessive short-term borrowings made by the company to meet its working capital requirements.

It is pertinent to note that the performance of the company failed to meet the market expectations, as the losses are much higher than what was being anticipated.

Even though the company controlled the cost of sales by 57%, the higher fixed costs incurred during the period could still not be covered by the sales revenue.

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