Pak Suzuki Motor Company’s loss dropped 45.6 percent to Rs1.6 billion in the year ended December 31, 2020, thanks to an increase in other sales and a tax reversal.
According to a notice sent to the Pakistan Stock Exchange on Monday, the company lost Rs2.9 billion in 2019.
As a result, the loss per share in 2020 will drop from Rs35.49 to Rs19.31.
Net sales for the carmaker plummeted by 34% from Rs116.5 billion in 2019 to Rs76.7 billion in 2020.
In a survey, Arsalan Hanif, an analyst at Arif Habib Limited, claimed that net sales dropped in CY20 due to a volumetric decrease of 47 percent in units sold. He noted that in 2020, the company will ship 59,052 cars, compared to 111,543 in 2019.
Despite a substantial drop in revenue, the company’s gross profit was Rs3.3 billion last year, up 66% from Rs1.98 billion the previous year.
“Margins improved to 4.3 percent in CY19, up 260 basis points from 1.70 percent the previous year. “The rise in margins was aided by higher vehicle prices,” he said.
The automobile company’s sales and marketing costs are expected to drop 35.4 percent to Rs1.6 billion in 2020.
Similarly, operating costs dropped by 29.8% in 2020, from Rs2.5 billion to Rs1.8 billion, from Rs2.5 billion in 2019.
On the other hand, other profits rose by 216.57 percent year over year. This category’s receipts totaled Rs704.4 million in 2020, up from Rs222.5 million in 2019.
According to Hanif, other profits increased as a result of currency increases and a surge in customer advances.
Finance costs rose by Rs2.7 billion in 2020, up from Rs2.1 billion in 2019.
“The company’s financing costs rose by 28% year over year due to a rise in borrowings to meet working capital requirements,” he said.
He went on to say that in CY20, the company had a tax reversal of Rs596 million, compared to Rs2 billion in the same time the previous year.
Pak Suzuki Motor Company’s stock rose Rs10.32 to Rs274.12 on the Pakistan Stock Exchange during the day, with 961,600 shares changing hands.