Due to a surge in other revenue and a tax reversal, Pak Suzuki Motor Company’s loss fell 45.6 percent to Rs1.6 billion in the year ended December 31, 2020.
The company announced a loss of Rs2.9 billion in 2019, according to a notice issued to the Pakistan Stock Exchange on Monday.
As a result, the loss per share decreased from Rs35.49 to Rs19.31 in 2020.
The carmaker’s net sales fell by 34% from Rs116.5 billion in 2019 to Rs76.7 billion in 2020.
Arif Habib Limited analyst, Arsalan Hanif claimed in a report that net sales fell in CY20 due to a volumetric drop of 47% in units sold. He pointed out that the company shipped 59,052 vehicles in 2020, compared to 111,543 in 2019.
Despite a significant drop in sales, the company’s gross profit was Rs3.3 billion last year, which was 66 percent higher than the Rs1.98 billion recorded in 2019.
“Margins rose to 4.3 percent, up 260 basis points year over year from 1.70 percent in CY19. Higher vehicle prices contributed to the increase in margins,” he said.
In 2020, the automotive company’s distribution and marketing costs fell 35.4 percent to Rs1.6 billion.
Similarly, administrative costs fell by 29.8% in 2020, from Rs2.5 billion in 2019 to Rs1.8 billion.
Other income, on the other hand, increased by 216.57 percent year over year. In 2020, receipts under this heading totaled Rs704.4 million, up from Rs222.5 million in 2019.
Other income rose as a result of exchange gains and a surge in customer advances, according to Hanif.
The company’s finance costs increased from Rs2.1 billion in 2019 to Rs2.7 billion in 2020.
“Due to an increase in borrowings to meet working capital requirements, the company’s finance costs increased by 28% year over year,” he said.
He went on to say that the company had a tax reversal of Rs596 million in CY20, compared to Rs2 billion in the previous year’s same period.
The share price of Pak Suzuki Motor Company increased Rs10.32 to Rs274.12 during the day on the Pakistan Stock Exchange, with 961,600 shares changing hands.
