PAK SUZUKI MOTOR COMPANY LTD.
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
June 27 - July 3, 2011
FINANCIAL PERFORMANCE (RS IN '000)
INDICATORS JAN TO MARCH 2011 JAN TO MARCH 2010 Turnover 12,569,748 10,035,815 Cost of sales 12,226,844 9,893,953 Gross profit 342,904 141,862 Distribution Costs 70,872 68,779 Profit before tax 220,358 43,820 Net Profit 91,425 (17,609) EPS (Rs) 1.11 (0.21)
Pak Suzuki Motor Company Limited is pioneer in automobile business in Pakistan. It has the most modern and the largest manufacturing facilities in the country with an annual production capacity of 150,000 vehicles. The vehicles produced include cars, small vans, pickups, cargo vans, and motorcycle. Pak Suzuki holds more than 50 per cent market share.
BALANCE SHEET (RS IN '000)
INDICATORS MARCH 2011 (UNAUDITED) DEC, 2010 (AUDITED) Current Liabilities 5,094,439 4,752,449 Current Assets 14,815,233 14,313,132 Non Current Assets 4,824,255 4,937,232
Pak Suzuki was formed as a joint venture between Pakistan Automobile Corporation and Suzuki motor corporation (SMC), Japan. The company was incorporated as a public limited company in August 1983 and started commercial operations in January 1984. The initial share holding of SMC was 12.5 per cent, which gradually increased to 73.09 per cent. Pak Suzuki has the largest dealer's network offering 3S facilities across Pakistan.
The spirited engine makes for an exhilarating drive and gives vehicles ultimate freedom. Alto and Mehran have bright, roomy, and comfortable cabins, which keep body relaxed and have strong and lighter bodies with smooth drive due to reduction of unpleasant noise harshness and vibration. Small turning radius and compact body make parking a breeze.
The Suzuki Liana, available in 1300 cc manual transmission takes customer out of the ordinary and into a realm. Liana is entirely different car, its style, dimension and comfort inspire customers to see everyday as an open door to a new age.
Pak Suzuki was pioneer in introduction of factory fitted CNG vehicles. Pak Suzuki is also exporting Suzuki ravi pickup, Liana and components to Bangladesh and Europe thus earning precious foreign exchange for the country.
In Pakistan, motorization level is eight cars per thousand persons as compared to 12 in India, 21 in Indonesia and 30 in Egypt. The overall economic indicators of the country are improving. Auto industry is on the path to recovery after two consecutive years of market recession.
The industry for cars and light commercial vehicles showed growth of 17.5 per cent during the quarter over same period of last year. During the period 43,753 units were sold against 37,227 units same period of last year. Responding to demand the production volume of the industry also increased from 36,959 units to 43,274 units. Pak Suzuki sold 23,469 units of cars and light commercial vehicles against 18,565 units same period last year. This represented an improvement in sales volume by 26.4 per cent. The company increased its production to 23,421 units against 18,541 units produced in the same period last year. The level of production represented 62 per cent capacity utilization. The organized market for motorcycles and three wheelers has also shown an improvement.
The overall demand increased by 15.5 per cent. During the period, 213,121 units were sold against 184,401 units same period of last year. The company sold 6,020 units during the period against 4,608 units in the same period of last year. Pak Suzuki earned after tax profit of Rs91.425 million compared to loss of Rs17.609 million in the same period of last year.
Net sales revenues increased 25.2 per cent (Rs2.533 billion) from Rs10.035 billion (March 2010) to Rs12.569 billion (March 2011) due to higher volume.
SUZUKI MOTOR BIKES PRICES (MAY 01, 2011)
MODEL ENGINE CAPACITY PRICE (RS) Sprinter Eco Euro2 110cc 69,400 Sprinter Euro2 110cc 72,900 GS 150 150cc 90,600 Shogun 100cc 81,500
Furthermore, the distribution expenses increased from Rs68.779 million to Rs70.872 million but percentage of sales decreased from 0.7 per cent to 0.5 per cent. Administration expenses increased from Rs142.046 million to Rs162.261 million but percentage of sales decreased from 1.4 per cent to 1.3 per cent. The increase in both the expenses was due to general inflation and increase in prices of petrol and utilities.
Other operating income decreased from Rs144.265 million to Rs131.518 million. The decrease was due to drop in income from bank deposits, which reduced because of lower customer advances. Financial cost decreased from Rs27.614 million to Rs4.598 million.
The stronger Japanese currency and weaker Pak rupee against other foreign currencies are the challenges for the profitability of the company. Because of tsunami and earthquake in March 2011 in Japan, the supply of components would affect production of the company in future.
Pak Suzuki believes in free and fair business practices and open competitive markets. Developing any association with competitors to distort the pricing and supply of products is contradictory to the company's business code of conduct.
Suzuki is a renowned name amongst the people of Pakistan as Suzuki products serve majority of Pakistani customers and have become a household name. Pak Suzuki is striving to maintain its leadership in Pakistani market.