SUZUKI: STRONG RESULTS

By SYED M. ASLAM
Nov 18 - 24, 2002

The local manufacturer of Suzuki, both cars and motorcycles, depicted a strong financial performance for the third quarter ended September 30, 2002. Unaudited accounts of Pak Suzuki Motor Company and Suzuki Motorcycles Pakistan depicts a strong performance by both the companies.

PAK SUZUKI MOTOR

For the quarter ended September 30, net sales registered a substantial increase of 40 per cent over the corresponding period last year from Rs 2,078 million to Rs 2,900 million. The operating profit during the comparative period increased five-fold from Rs 52.44 million and Rs 263 million. Pre- and post-tax profit also registered a substantial increase from Rs 71 million to Rs 296 million and from Rs 46 million to Rs 192 million respectively, both depicting a four-fold increase.

The strong performance has also translated into better results for nine months ended September 30. Net sales increased from Rs 6,620 to Rs 8,152 million, up by almost 25 per cent over the corresponding period last year while operating profit registered over three-fold increase from Rs 278 million to Rs 860 million. Pre- and post-tax profit depicted a similar increase from Rs 295 million to Rs 950 million and from Rs 250 million to Rs 547 million.

The strong performance has not only helped Suzuki back on the tracks after going through lean years due to emergence of competition for the first time in recent years. For the quarter ended September 30 the unappropriated profit registered an over eleven-fold increase for the company from Rs 46.9 million to Rs 546.6 million.

SUZUKI MOTORCYCLES PAKISTAN LIMITED

The strong financial performance is more meaningful as the company has managed to turn profitable only recently and as it would give the company a solid base. For the quarter ended September 30, the company generated a total revenue of Rs 202 million Rs 63 million or 46 per cent more than Rs 139 million it earned in the corresponding quarter last year.

The operating profit registered an almost three-fold increase from Rs 12.7 million to Rs 35 million while post-tax profit increased an almost six-fold increase from Rs 5.3 million to Rs 30 million.

The strong performance for the quarter under review helped the company to better its overall performance for nine months ended September 30. Total revenue increased from Rs 451 million to Rs 521 million; operating profit almost doubling from Rs 42 million to Rs 91 million, and profit-after-tax depicting a four-fold increase from Rs 19 million to Rs 76 million.

A number of factors contributed to the overall profitability, the most obvious being improved revenue-cost ratio the total revenue for nine months under discussion was Rs 521 million against cost-of-sales of Rs 351 million compared to respective corresponding figures of Rs 451 million and Rs 332 million for nine-month period ended September 2001. The corresponding quarterly performance under this head even better: revenue of Rs 202 million and cost-of-sales of Rs 139 million for quarter ended this September which was much better than sales of Rs 139 million and cost-of-sales of Rs 103 million during the corresponding quarter last year.

In addition, lower financial charges also contributed to the profitability Rs 3 million for the quarter ended September this year compared to Rs 6.7 million in the corresponding period last depicting a reduction of over 50 per cent.

The performance has helped Suzuki Motorcycles to reduce its accumulated losses by Rs 78 million to Rs 225.6 million from Rs 303.6 million.

Table 1
FINANCIAL RESULTS OF SUZUKI CARS (UNAUDITED)

(Rupees in thousand)

 

July-Sept 2002

July-Sept 2001

Net sales

2,900,038

2,078,068

Cost of Sales

2,573,494

1,969,202

Gross Profit

326,544

108,866

Operating Profit

263,015

52,447

Other Income

60,429

25,563

Financial & other charges

27,360

6,936

Profit before taxation

296,084

71,074

Profit after taxation

192,453

46,198

Unappropriated profit carried forward

546,678

46,906