Pakistan Suzuki Motor Company Limited (PSMC) has announced a significant turnaround in its financial performance for the third quarter of 2023. In stark contrast to the same period the previous year when the company suffered a loss of Rs. 2.48 billion, PSMC reported a substantial profit after tax of Rs. 3.8 billion for the quarter ending on September 30, 2023.
Exceeding Expectations According to Topline Securities, this remarkable reversal surpassed expectations, primarily attributed to improved gross margins. Despite experiencing a 34 percent reduction in sales volume due to increased car prices, the company managed to maintain steady quarterly revenues year-on-year (YoY). Additionally, the quarter-on-quarter results demonstrated an impressive 40 percent increase in revenue, accompanied by a substantial 47 percent surge in car volumes.
Revenue and Sales During the third quarter of 2023, Pakistan Suzuki’s sales reached Rs. 29.9 billion, marking a modest YoY growth of 0.38 percent. However, sales for the nine months ending on September 30 witnessed a significant YoY decline of 48 percent, plummeting from Rs. 142 billion to Rs. 73 billion.
Gross Margin and Income Consequently, the gross margin for the third quarter of 2023 stood at 14.1 percent, with a slightly lower figure of 11.4 percent for the nine months ending September 30. The decrease in bookings led to a 39 percent YoY decline in other income, which dropped to Rs. 1.6 billion from the previous year’s Rs. 2.6 billion.
In the period from July to September, other income also experienced a YoY decline of 28.5 percent, amounting to Rs. 761 million. Notably, the finance cost, which had a substantial negative impact on the company’s bottom line over the past nine months (Rs. 9.9 billion), turned positive in the third quarter of 2023.
During the review quarter, the company recorded a finance income of Rs. 144.5 million, primarily attributed to exchange rate gains, as reported by Topline Securities. This marked a significant improvement in PSMC’s financial outlook.