Pak Suzuki’s Quarterly Loss Jumps to Rs12.9bn

Pak Suzuki’s Quarterly Loss has Jumped to highest ever quarterly loss of Rs12.9 billion (LPS of Rs157) in comparison to a loss of Rs460mn (LPS of Rs5.6) in 1Q2022 and a loss of Rs3.8bn (LPS of Rs47) in 4Q2022.

As a result, PSMC’s equity decreased to around Rs7bn in 1Q2023 from Rs20bn in 4Q2022.

The company’s financial performance fell below industry expectations due to the finance cost, which rose higher than expected. Suzuki Car Prices In Pakistan in 2023 | Suzuki New Car Models

The finance cost, including exchange loss, markup on late delivery, and demurrage & detention charges, increased 12x YoY and 3x QoQ to Rs12.8bn in 1Q2023.

In the previous quarter, PSMC had announced that the rupee’s devaluation against the US dollar resulted in an unrealized loss of Rs9bn, which would impact the 2023 result.

Despite a hike in car prices, PSMC’s gross margins for 1Q2023 were 9.1%, slightly lower than the previous quarter’s 9.8%.

Furthermore, revenues for the quarter declined by 54% YoY and 64% QoQ, with a primary reason being a 74% YoY and 70% QoQ fall in unit sales.

Distribution and marketing expenses were up 20% YoY but down 18% QoQ to Rs878mn in 1Q2023, reflecting a decline in volumetric sales and higher inflation.

The company’s other income also decreased by 86% YoY and 87% QoQ to Rs74mn in 1Q2023, as the number of bookings declined.

Lastly, PSMC recorded a tax expense of Rs274mn in 1Q2023, which differs significantly from the tax reversal of Rs188mn in 1Q2022 and the tax expense of Rs3.8bn in 4Q2022.