KARACHI: Pakistan’s premier tyre manufacturer General Tyre has earned a profit after tax of 406 million rupees in the first six months of the current financial year despite tough economic conditions because of covid-19, against the profit after tax of 29.4 million rupees in the same period of last year.
The company recorded net sales of 6.45 billion rupees in the reported period. This was up by 41% from 4.56 billion rupees in the corresponding period last year. This resulted in the earnings per share of Rs 3.33 against Re 0.24 in the same period last year.
This impressive profit was the result of the company’s focus on the growth of the Replacement Market (RM) also known as the aftermarket which grew by 72% as compared to last year value wise. The increase is to a large extent due to the steps taken by the Government of Pakistan to curb smuggling in the country. Chief Executive Officer General Tyre Hussain Kuli Khan, while commenting on the improved profits of the company stated that strict surveillance of the borders during covid-19 played a positive role in the company’s performance.
“This was the reason that smuggled tyres were not available in the local market which helped the local industry’s share to grow,” he added.
Original Equipment Manufacturers (OEM) sales grew across the board by 23% value wise. They are nearing normal capacity and that also helped the company. The revival of the tractor sales this year is a heartening signal.
Besides local demand, the company’s exports also increased by 2 times in the reported period and it exported tyres amounting to Rs 93.3 million.
“The local tyre industry is still facing problems due to heavy under-invoicing on imports of tyres that is also resulting in revenue losses to the government. The government needs to re-evaluate the ITPs value at least twice a year if not every quarter. As the raw material prices have been showing an upward trend since last November. This was further aggravated by many folds’ increase in freight charges,” said Hussain.
Hussain revealed that the company is in the process of developing new tyre sizes and bringing modern designs for OEMs and the RM, which will further enhance the company’s leading position in the local tyre industry. An example is that it is going to introduce SUV Radial Tyres of 18 inch rim size and OTR tyres.
“We are also working on strategies to reduce our operational cost,” said Hussain.
He further added that they are confident to exploit the long term business opportunities while countering the economic challenges.—PR
Copyright Business Recorder, 2021
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