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KARACHI: Indus Motor Company Limited (IMC) announced its financial results for the second quarter ended December 31, 2022, witnessing a decline in profit after tax by 74.3 percent to Rs 2.62 billion, as against Rs 10.18 billion in the previous year.

The decline in net profit was mainly due to lower completely knocked down (CKD) and completely built units (CBU) sales volume and increase in input costs mainly on account of severe PKR devaluation against US dollar and the rising costs of production. The net operational loss was off-set mainly by higher other income owing to higher interest rates.

The net sales turnover decreased by 35.8 percent to Rs 86.83 billion, as compared to Rs 135.18 billion for the same period last year. The company’s overall market share for the quarter stood at 18 percent.

The combined sales of CKD and CBU vehicles decreased by 52 percent to 18,672 units compared to 38,632 units sold in the previous year. Vehicle production too decreased by 49 percent to 18,562 units as compared to 36,120 units produced in the same quarter last year.

The decline in production was mainly due to limited imports of CKD kits and vendor supply chain limitations, which led to regular plant shutdowns during the period.

IMC Chief Executive, Ali Asghar Jamali, commented, “The country continues to reel with the aftershocks of the massive devastation caused by the floods, unrelenting inflation, depleting forex reserves, an increase in the current account and fiscal deficits, along with an unfavourable global environment.

The second quarter too has been rough for the auto industry; frequent shutdowns forcing it to operate at less than 50 percent production capacity as a consequence of continuing import restrictions. With future production volumes expected to hit another low, we are left with little choice but to offer full refund along with interest, to our customers.”

The earnings per share of the company for the half year ended December 31, 2022, is Rs 33.45, compared to Rs 129.45 in the previous year. Despite the challenging quarter faced by the company, the Board of Directors declared a second interim cash dividend of Rs 10.2 per share, compared to Rs 30 per share for the previous year.

Copyright Business Recorder, 2023

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