oyota Indus Motor Company (IMC) has announced its financial results for the half-year ended, December 31st, 2019.
The company posted a profit of Rs. 2.30 billion in the first half, down by 66.70% as compared to a profit of Rs. 6.91 billion in the same period last year. IMC’s net profit has declined due to a decrease in sales volumes. According to the company, the marked decline in sales and profit for IMC was also a result of the devaluation of the Pakistani Rupee against the US Dollar.
The company’s net sales turnover for the first half of 2019-20 decreased by 44.05% to Rs. 42.77 billion as compared to Rs. 76.44 billion recorded in the same period last year. However, the cost of sales of the company decreased by 41.24% to Rs. 39 billion as compared to Rs. 66.38 billion.
IMC has stated that the demand for automobiles declined significantly in Pakistan during the first half of the fiscal year 2019-2020, due to a slowdown in the economy, devaluation of the Pakistani rupee against the US Dollar, and various structural reforms and policies of the Government.
Combined sales of CKD and CBU produced by IMC-Toyota during the half-year ended December 31, 2019, stood at 14,453 units. This was down by 56% over 33,087 units for the same period in the previous year.
|Half year FY19-20 (Volumes)|
IMC has reported that the decline was mainly due to custom duty increase and levy of FED. It also said that while a rise in interest rates reduced auto financing, the devaluation of Pakistan Rupee was also a factor in the decline.
The company also stated that the demand was also affected by Additional Custom Duty and FED coupled with rising inflation and declining purchasing power of consumers. Industry growth remained heavily dependent on consistent government policies and favorable economic conditions, stated the company.
Other income of the company was down to Rs. 1.22 billion, showing a decrease of Rs. 41.52% as compared with Rs. 2.09 billion due to a drop in new car bookings during the period.
The Earnings per Share of IMC for the half-year ended December 31, 2019, was Rs. 29.3 as compared to Rs. 87.9 in the same period last year. Even then, a second interim cash dividend of Rs. 6 per share was declared by the company Board of Directors for the half year ended December 31, 2019.
Mr. Ali Asghar Jamali, CEO, Indus Motor Company, says, “I am happy to state that during this period, IMC has remained focused on improving its operational efficiencies, maintaining high quality standards, effectively managing cost pressures and delivering maximum value to its customers.”