Profits of Pak Suzuki Motor Company Limited’s (PSMC) declined around 30% at the end of Q1 2018.
The recorded profit was Rs. 904.14 million on 31st March 2018. However, the profit was Rs. 1.3 billion in Q1 2017. Pak Suzuki did not announce any cash dividend. Share prices are also fell down from 15.88 to 10.99 in the corresponding financial period.
Suzuki’s net sales rose by 31.9% to Rs 31.51 billion when contrasted with Rs 23.89 billion in the earlier year as Pak Suzuki continued business according to the expectations because of 19.08% YoY development in volumes and higher level of costs of the autos, in addition to the expansion in costs in Q1 2018. Suzuki has persistently raised costs for its autos. Pak Suzuki back in January declared that the costs are being expanded because of the Pakistani Rupee devaluation.
Possible Causes of Pak Suzuki Profit Decline
The expansion in profit for 1QCY18 (Quarter on Quarter up 24%) is basically inferable from the increment in deals volume.On consecutive premise, income enhanced by 24% QoQ, which was by virtue of 4% QoQ development in volumes and 50bps QoQ increase in gross margins. Profit Margin also declined because of sharp due to the devaluation of Japanese Yen against the US Dollar (5% YoY) and additionally Pakistani Rupee devaluation against the US$ (6% YoY).