Despite the impediment to the local manufacturing industry caused by rising car imports, Indus Motor Company has managed to report impressive year-end financial results, signing off on a robust 57 percent year-on-year bottom line growth. The firms board of directors announced an above consensus final dividend of Rs24 per share here on Thursday, taking the full-year dividend up to a remarkable Rs32 per share. Coming off the back of 9 percent growth in volumetric sales despite price hikes across various models, the firm reported a 24.7 percent year-on-year growth in net sales. Sales were further boosted towards the end of FY12 with a roughly 7 percent increase in unit sales in the fourth quarter, coming mainly as a result of demand from the Government institutions and farmers who had the seasonal Rabbi income to spare. On the whole, the companys fourth quarter earnings also showed notable improvement over the last quarter, with the NPAT growing by 25 percent, going up to Rs1.4 billion as compared to Rs1.1 billion recorded during 3QFY12. Representing an EPS of Rs54.74, the company posted a record net profit after tax of Rs4.3 billion at the end of the year - versus Rs2.7 billion that was recorded during FY11- having managed a superior performance in spite of the general slowdown in Pakistans economic environment. In the last 12 months, Indus Motors has managed to root past major setbacks including the depreciating rupee, exorbitant increases in prices of steel and other inputs, among other factors which managed to fell other major competitors such as Honda Atlas who fared much worse in comparison. Although this exceptional performance has mainly been demand-driven; with the firms Corolla remaining a firm favourite especially with the agrarian income sector, upon closer inspection, it is evident that consistent price hikes off setting similar increases in input prices have been a major factor behind the maintenance of INDUs margins. Going forward into FY13 the record profits - the highest ever for INDU - would seem to be a hard act to follow for a number of reasons. Principally, the firms ability to pass off cost increases onto its customers is likely to be hampered by the new AIDP policy which is expected to be announced soon. Not only is the policy expected to put a cap on the pricing power of the local market players, it is also anticipated to further lower import duties on foreign vehicles, thereby making them even more attractive.
================================================ Indus Motor Co. Ltd. ================================================ (Rs mn) FY11 FY12 chg ================================================ Sales 61,703 76,963 25% Cost of sales 57,614 70,401 22% Gross profit 4,089 6,562 60% Gross profit margin 6.63% 8.53% 29% Other operating income 1,508 1,774 18% Other operating expenses 356 516 45% Profit after taxation 2,743 6,312 130% EPS (Rs) 34.9 54.74 57% ================================================
Source: KSE notice
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