Pak Suzuki Motor Company Limited (PSMC) has made significant financial strides, reporting a profit after tax of Rs. 3.8 billion for the third quarter of 2023, marking a turnaround from a loss of Rs. 2.48 billion during the same period last year. However, the company still posted a loss of Rs. 5.87 billion for the first nine months of 2023, compared to a loss of Rs. 2.5 billion in the same period in 2022.
This improvement in the third quarter was a positive surprise, exceeding expectations, primarily due to higher gross margins. Despite a 34 percent decrease in car sales volume, PSMC’s revenues remained steady year-on-year, attributed to higher car prices. Additionally, the company’s revenue for the quarter increased by 40 percent on a quarter-on-quarter basis, in line with a 47 percent surge in car sales.
In the third quarter of 2023, PSMC’s sales reached Rs. 29.9 billion, a modest 0.38 percent year-on-year increase. However, sales for the first nine months of 2023 witnessed a sharp 48 percent decline, dropping from Rs. 142 billion to Rs. 73 billion.
The company’s gross margin for the third quarter was 14.1 percent and 11.4 percent for the nine-month period. Other income decreased by 39 percent year-on-year, primarily due to a decrease in bookings, while finance costs improved in the third quarter, with the company earning a finance income of Rs. 144.5 million.
PSMC also incurred higher distribution and marketing expenses, which rose by 19 percent in the third quarter due to increased sales and inflation. The company paid Rs. 309 million in taxes during the third quarter, totaling Rs. 1.85 billion for the first nine months of 2023.
The company’s stock price saw a 7.5 percent increase to Rs. 205.94, with a turnover of 674,597 shares, reflecting market optimism. In addition to the financial results, PSMC’s Board of Directors has approved the company’s delisting from the Pakistan Stock Exchange as part of its strategic plan for future growth.