Pak Suzuki Motor Co. (PSMC): 1Q2019 LPS of Rs11.92 vs. EPS Rs10.99 in 1Q2018 (Below expectations)
(PDF attached)
(Apr 23, 2019)
- Pak Suzuki (PSMC) has reported its 1Q2019 result declaring Loss Per Share (LPS) of Rs11.92 vs. EPS of 10.99 in same period last year. The decline in profitability was mainly due to depletion in GP margin by 5ppts YoY to 3% (25-Quarter low) amidst rupee devaluation, which considerably increased the company’s cost of doing business. However, its impact to consumers was gradually passed on.
- Sales have increased by 9% YoY due to multiple price hikes while volume down by 4% YoY. Notable decline was witnessed in Mehran variant, down 24% YoY & is now replaced by newly launched model Alto 660.
- Finance cost of the company was up 5.5x YoY to Rs327mn due to increase in debt borrowings and interest rate (+475bps to 10.75% since Jan 2018). Further, admin cost of the company increased by 26% YoY.
- Despite loss before taxation, the company booked tax expense of Rs452mn, which is equivalent to 1.3% of turnover (minimum turnover tax).
- We flag 1) further unfavorable movement in exchange rate & commodity prices, 2) regulatory changes, 3) increased competition from existing and new players and 4) disruptions in operations of principal company, as key risks for the company.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.