March 22, 2022 (MLN): Pak Suzuki Motor Company Ltd. (PSMC) has wrapped up the year 2021 on a positive note as the company witnessed a notable turnaround wherein it posted a net profit of Rs2.68bn in CY21, compared to the net loss of Rs1.38bn incurred in the corresponding period of CY20, the company filing on PSX showed today.
The company has had a legacy in the small/economy car segment since its inception. One of the most iconic cars of PSMC was ‘Mehran’ which is replaced by the new Alto, after its discontinuation.
The turnaround was driven by higher sales volume, a decline in finance cost and higher other income pertaining to increasing customer advances and longer lead time.
In conjunction with results, the company also announced a cash dividend of Rs6.5 per share.
During the period, sales revenue of the company improved by a staggering 109% YoY from Rs76.72bn to Rs160.08bn, mainly on the back of volumetric growth along with upward revision in prices. The gross margins during CY21 gross margins clocked in at 5.1% in contrast to 4.3% in CY20.
With regards to major expense heads, the company’s distribution and marketing expenses clocked in at Rs2.94bn, up by 79% YoY while the administration cost inched up to Rs2.48bn, an increase of 39% YoY.
The other income settled at Rs2.22bn, up by 3.1x YoY owing to a surge in cash and bank balances.
Furthermore, finance cost witnessed a massive decline of 72% YoY to Rs737mn from Rs2.66n on the back of lower debt levels along with lower financing rates.
It is pertinent to mention that the health of the company has improved in last quarter onwards whereas now the management is eyeing growth. PSMC launched its new Swift last month which is a high margin product, a report by AKD Securities noted.
It is also expected that the new model euphoria to make the company’s margins more sustainable at around 5.5%, the report said.
Financial Results for the Year ended December 31, 2021 (Rupees in thousands) | |||
|---|---|---|---|
| Dec-21 | Dec-20 | % Change |
Turnover | 160,082,255 | 76,720,132 | 109% |
Cost of sales | (151,911,517) | (73,120,914) | 108% |
Gross Profit | 8,170,738 | 3,599,218 | 127% |
Distribution Cost | (2,943,268) | (1,639,791) | 79% |
Administrative expenses | (2,480,801) | (1,790,825) | 39% |
Provision of impairment losses | (69,548) | (33,551) |
|
Other income | 2,222,665 | 704,394 | 216% |
Finance cost | (737,041) | (2,664,734) | -72% |
Workers' profit participation fund | (199,764) | – | – |
Workers' welfare fund | (79,906) | (15,000) | 433% |
Profit from operations | 3,883,075 | (1,840,289) | – |
Share of loss of equity accounted investee | (87,668) | (47,765) | 84% |
Profit before taxation | 3,795,407 | (1,888,054) | – |
Taxations: | (1,115,931) | 509,939 | – |
Net Profit for the period | 2,679,476 | (1,378,115) | – |
Loss/ Earning per share basic and diluted | 32.56 | (16.75) | – |
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