KARACHI: Pak Suzuki Motor Company (PSMC) announced its 2QCY19 ended June 30, 2019 financial results wherein the company booked net loss of Rs545 million translating into loss per share (LPS) of Rs6.62 versus profit after tax of Rs394 million and earning per share (EPS) of Rs4.78 registered during the same quarter last year.
Earnings arrived better than market expectation mainly due to notable tax reversal booked by the company during the quarter.
Sales revenue of the company stayed almost flat (+1%YoY) at Rs31. 040 billion during 2QCY19 as compared to Rs30.881 billion in 2QCY18 despite fall in sales volumes (-17%YoY) as higher car prices lead to sustenance in revenues.
With regards to gross profitability, the company exhibited decline of 82%YoY at Rs312 million in 2QCY19 whereas gross margins arrived 4.7ppsYoY lower at a mere 1.0% during 2QFY19 as PSMC was unable to pass on full impact of rising production cost.
Finance cost increased exponentially (18.45x) owing to higher short-term borrowings & interest rates whereas other income declined 75%YoY, thereby further eroding profitability.
However, the company booked considerable tax reversal of Rs1. 052 billion during 2QCY19 which significantly curtailed losses.