Suzuki Pakistan posts Rs10b loss in 2023 for poor sales
Business
The company’s sales dropped by half from Rs. 202 billion to Rs. 102 billion
(Web Desk) - Pak Suzuki Motor Company Limited (PSMC) reported a big loss of Rs. 10 billion for the year ending December 31st, 2023.
This is a 50% increase from the Rs. 6.3 billion loss they had the previous year.
The company’s sales dropped by half from Rs. 202 billion to Rs. 102 billion compared to last year.
In 2023, the company had a loss per share of Rs. 122.35, which is higher than the Rs. 77 per share loss from the previous year.
Despite the drop in sales, PSMC’s gross profit increased by 48% to Rs. 17.27 billion. Their profit margin also improved to 17%, which is higher than last year.
Other income for PSMC decreased by 33.4% to Rs. 2.1 billion from Rs. 3.2 billion.
PSMC’s stock price closed at Rs. 17.02, up by Rs. 0.83 or 5.13%, with 33.7 million shares traded on Monday.
In February 2024, PSMC started a share purchase offer to sell 22.14 million shares at Rs. 609 per share and planned to delist from the Pakistan Stock Exchange.
This decision came after Suzuki Motor Corporation, the main shareholder of PSMC, decided to buy all the shares of the company held by others.
In 2023, PSMC had a loss per share of Rs. 112.35, compared to a loss of Rs. 77 per share the previous year.
The company’s sales in 2023 were Rs. 102.11 billion, almost half of the Rs. 202.47 billion from last year.
Despite the lower sales, PSMC’s gross profit rose to Rs. 17.27 billion in 2023 from Rs. 11.68 billion in the previous year. This made the company’s profit margin go up to 16.91% from 5.77% in 2022.
The drop in sales happened because the company was not operating for most of the year due to a shortage of inventory.
PSMC’s administrative expenses increased by over 31% from Rs. 2.96 billion in 2022 to Rs. 3.89 billion in 2023.
The company also had a big increase in other expenses, going from Rs. 8.89 million in 2022 to Rs. 2.12 billion in 2023.
Despite the higher expenses, PSMC made a profit before tax of Rs. 113.49 million in 2023, compared to a loss of Rs. 3.03 billion in 2022.
The company had to pay Rs. 10.1 billion in taxes in 2023, which erased the entire profit, compared to Rs. 3.14 billion in taxes paid the previous year.
Last October, PSMC announced plans to voluntarily delist from the stock exchange, citing reasons like consistent losses, no dividends, and low valuations.
This year, Suzuki Motor Corporation, the parent company of PSMC, decided to buy back PSMC’s shares at Rs. 609 per share, which is 50% higher than their initial offer of Rs. 406 per share made in December.
