Karachi, March 20, 2023 (PPI-OT): PSMC: CY22 Result Review

Pak Suzuki motor company (PSMC) announced it 4QCY22 result today, where it posted LAT of PkR3.83bn (LPS:46.53) compared to loss of PkR2.49bn (LPS: PkR30.25) in third quarter. This brings cumulative loss for CY22 to PkR6.34bn (LPS: PkR76.9). This loss comes on the back of high finance costs as company paid high demurrage and detention charges along with the hefty markup paid on late deliveries.

Revenue for the quarter has increased by 1.1xQoQ to reach PkR60.0bn, while is down by 26%YoY as offtakes have witnessed a decline when compared to 4QCY21. On the quarterly basis, the surge in revenue is due to offtakes increasing by 91%.

Gross margins for the quarter has increased to 9.8% compared to 5.2% in 3QCY22, as higher effective prices heavily supported high gross margins amid a stable PkR/USD parity.

Finance cost for the company have increased substantially to clock in at PkR4.97bn mainly on the account of markup paid on late deliveries and demurrage and detention charges which has severely impacting the bottom line.

Other income for the quarter clocked in at PkR546mn decreasing substantially compared to PkR1.06bn in last quarter as cash balances have decreased amid losses recorded in the last quarter along with lower advances from customers.

The effective tax has increased substantially amid impact of super tax and minimum turnover applicable on the Automobiles sector, doubling the loss incurred by the company.

In what has turned out to be the worst year in PSMC’s history, the company’s net equity has eroded by ~24% in the calendar year.

In another notice served today, the company apprised investors that it currently has an unrealized loss of PkR9bn (PkR109/sh) on foreign liabilities. This amount culminates to nearly half of the company’s equity and is expected to take CY23’s earnings into the red.