Karachi: Indus Motor Company Limited (IMCL) faced a challenging fiscal year ending June 30, 2024, marked by a decrease in net sales turnover but an increase in profitability due to strategic cost management and favorable currency movements.
The company recorded a 14% decline in net sales turnover, totaling Rs. 152.48 billion, down from Rs. 177.71 billion the previous year. This decline was largely attributed to decreased sales volumes of Completely Knocked Down (CKD) and Completely Built-Up (CBU) units. The automotive industry continued to grapple with high duties and taxes, elevated interest rates, and reduced consumer purchasing power which negatively impacted demand.
Despite the downturn in sales, IMCL reported a substantial 56% increase in profit after tax, which rose to Rs. 15.07 billion from Rs. 9.66 billion in the prior year. According to information available from the Pakistan Stock Exchange (PSX), this improvement was primarily due to effective cost reduction initiatives, increased localization of parts, and the appreciation of the Pakistani Rupee against the Japanese Yen, which lowered vehicle costs.
During the latter part of the previous year, the company managed to offset losses from significant currency depreciation by adjusting vehicle prices, optimizing sales mix, and reducing operational costs. The introduction of the Toyota Corolla Cross in December 2023, noted for its high localization of hybrid components, also positively impacted financial results.
The board declared a final interim cash dividend of Rs. 43 per share for the quarter ended June 30, 2024, up from Rs. 29 per share in the corresponding quarter last year. Total dividends for the fiscal year amounted to Rs. 114.7, compared to Rs. 71.8 in 2023.
IMCL’s contributions to the national treasury amounted to Rs. 68.5 billion, representing about 0.8% of Pakistan’s total tax revenue for the period. Since its inception in 1989, the company has contributed over Rs. 780 billion to the national exchequer.
Operational data shows a significant reduction in vehicle sales and production, with sales units dropping 33% to 21,063 vehicles and production decreasing by 40% to 19,599 units compared to the previous year. Despite these challenges, the company's financial health showed improvements with total assets increasing by 19% to Rs. 145.820 billion and shareholders' equity rising 12% to Rs. 67.226 billion.
On the stock market, IMCL’s share price saw a significant increase, closing at Rs. 1,746.55 on September 2, 2024, which represents an 83% increase from the price on August 28, 2023. The company's market capitalization also rose dramatically to Rs. 137.279 million.