KARACHI (September 20 2004): Indus Motor Company Limited recorded 17.14 percent growth in profit for the year ended June 30, 2004, declaring a final dividend of 50 percent for the period.
The profit after tax (PAT) surged to Rs 1,473.242 million, against Rs 1,257.614 million of corresponding period last year. The Company also announced a 50 percent final cash dividend for its shareholders. This is in addition to an interim cash dividend of 40 percent already announced during the year.
During FY04, the top line of the Company witnessed an exceptional growth of 44 percent mainly on the back of surging auto sales fuelled by cheap availability of funds in the consumer market. The net sales for the period amounted to Rs 22,521.337 million against Rs 15,634.980 million reported during the corresponding period last year.
The Company reaped the dividends of the growth in its top line in the form of higher gross profits, which climbed by Rs 547.040 million to Rs 2,693.717 million as compared to Rs 2,146.677 million reported during the same period last year–a growth of 25.48 percent. However, the gross margin of the Company for the period declined by 177 bps to 11.96 percent during FY 03-04 from 13.73 percent reported during last year.
The operating profits for the year stood at Rs 2,253.936 million against Rs 1,812.427 million reported last year posting a growth of over 24.36 percent.
Substantial decrease was also witnessed in the financial charges of the Company, which dropped by 34.22 percent to Rs 59.568 million against Rs 90.557 million reported last year.
The pre-tax profit for the year stood at Rs 2,266.291 million against Rs 2,166.734 million of last year recording an increase of almost 17.25 percent. A decline in gross profit trickled down to declining net margins of the Company, which went down by 150 basis points to 6.54 percent against 8.06 percent last year.
The Net Profit of the Company for the financial year stood at Rs 1,473.242 million against Rs 1,257.761 million, reported last year translating into an EPS of Rs 18.74/share against Rs 16.00/share last year.
Automobile Sector Sales and Production According to the latest figures released by the Pakistan Automotive Manufacturers Association (PAMA), the year FY04 saw the production and sales of the auto sector move upwards aggressively. During the year FY 2003-04 a total of 98,461 cars were produced against 62,073 cars produced during the last year–an increase of 58.82 percent.
Meanwhile, sales during the period climbed to 96,674 cars. PAMA figures reveal that a total of 20,525 Toyota Corolla cars were manufactured while 20,321 were sold during FY04.
The production and sales of Daihatsu Cuore cars was recorded at 6,468 units and 6,393 units, respectively while Toyota Hilux saw its production burgeoning to 2,029 units being met by sales of 2,399 units. Sales during the last quarter of FY04 were the highest with Toyota Corolla sales climbing to 5,827 units, Daihatsu Cuore, 2,215 and Hilux, 889. Auto Sector Update:
The Company posted an improved result for 2003-04. However, the future of the automobile sector still rests on government policies for the sector. The recent decision of allowing import of used cars under transfer of residence/baggage scheme (CGO-10-2004), the condition of allowing sale of cars only to NTN holders, high international steel prices and the forecasted strengthening of yen against rupee coupled with the WTO regime due from January 2005 have put the future of the domestic automobile sector at stake. These decisions have already affected auto sales in the post-balance sheet period and have also resulted in the lacklustre performance of the auto sector stocks.