The country’s largest car assembling company Pak Suzuki has posted a net profit of Rs1.93 billion in calendar year 2014 (CY14), up 4% compared to Rs1.85 billion CY13.
Earnings per share (EPS) jumped to Rs23.35 in CY14 compared to an EPS of Rs22.37 in CY13. The result was accompanied by a final cash dividend of Rs5 per share for CY14.
The increase in profits was primarily driven by 140 basis points expansion in margins while the company sales also increased by 5%, backed by an increase in volumetric sales, BMA Research said yesterday.
However, the profits earned by the company were lower than market expectations.
“The earnings remained lower than our expectation, as the entity likely booked inventory losses owing to sharp decline in steel prices,” stated Sherman Securities in its analysis. Global Research even predicted on Tuesday that Pak Suzuki would report a profit of Rs2.24 billion, up 21% compared to CY13.
In the fourth quarter (Oct-Dec) of CY14 alone, the company posted an EPS of Rs3.8 compared to an EPS of Rs4.51 in third quarter of CY14, down 16%.
Analysts say the Apna Rozgar Scheme – a taxi scheme by the government of Punjab – is expected to improve the company’s earnings going forward.
Higher earnings are primarily due to improved gross margin of 8% against 6% last year. During the period, the gross margin increased due to a reduction in cost of production owing to favourable movement of the Pakistani rupee against the Japanese yen – the rupee appreciating by an average 9% during the year.
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