Indus Motor after-tax income plunges 72% in Q2 FY23

Indus Motor Company Limited’s Profit After Tax (PAT) fell 72% from Rs4.75 billion in 2QFY22 to Rs1.33 billion in 2QFY23, translating into Earning Per Share (EPS) of Rs16.9 compared to an EPS of Rs60.4 for the same time last year.

Its Board of Directors had met on February 10 to review the company’s condensed financial and operating performance for the half-year that ended December 31, 2022.

Along with the result, the company also announced interim cash dividend of Rs10.2/share. This is in addition to the first interim cash dividend of Rs8.2/share, already paid.

The assembler of Toyota automobiles in Pakistan posted net sales revenue of Rs49.584 billion, a 29% decrease compared to Rs69.63 billion recorded same period last year.

“Although effective selling prices are higher, volumes have shrunk to half of the 19,426 units sold in 2QFY22,” said AKD Securities Limited.

IMC witnessed a gross loss of Rs491 million during 2QFY23, as compared to a gross profit of Rs5.264 billion posted in same period last year.

“Cost pressures especially currency devaluation has outweighed the impact of price hikes and increased volumetric sales,” said Ismail Iqbal Securities Limited.

Meanwhile, the ‘other income’ segment of Indus Motors Company stood at Rs3.454 billion in 2QFY23, a healthy increase of 38% as compared to Rs2.502 billion registered in SPLY.

Last month, IMC said it will completely shut down its plant from February 1 to February 14, citing inventory shortage.

When the company restarts production on February 15, it will do so on a single-shift basis until further notice, it said in communication issued to the Pakistan Stock Exchange.

Indus Motor had said the company and its vendors continue to face major hurdles in import of raw materials and receiving clearance of their consignments from commercial banks.

Just days before this, Indus Motor had increased prices of its cars by as much as Rs1.16 million, following significant depreciation of the Pakistani rupee against the US dollar. This was its second price-hike in two weeks.

Automobile sales in Pakistan fell 38% in December 2022 to 16,811 units on a year-on-year basis, according to data released by Pakistan Automotive Manufacturers Association, due to restrictions on import of completely knocked down (CKD) units and problems pertaining to opening of letters of credit (LCs) for imports.