Lahore: Millat Tractors Limited (MTL) has reported a significant decline in its sales volume for the nine-month period ending March 31, 2025, according to an interim financial report presented by the company's Board of Directors. The company sold 14,518 tractors during this period, down from 23,510 units in the same timeframe last year, marking a 38.2% decrease in sales volume.
In monetary terms, MTL's sales dropped from Rs. 69.64 billion to Rs. 39.99 billion, reflecting a 42.6% decrease. Earnings per share (EPS) also fell to Rs. 25.3 per share, compared to Rs. 42.01 per share in the corresponding period of the previous year. This downturn is attributed to a challenging business environment in the tractor manufacturing industry, particularly following amendments in the sales tax regime under the Finance Act 2024.
The revised tax structure introduced inconsistencies and ambiguities, creating uncertainty and negatively impacting customer confidence, which in turn led to a sharp decline in sales. However, the company noted that the subject anomaly was addressed by the second quarter of the fiscal year 2024-25. Additionally, adverse weather conditions and water scarcity have contributed to lower crop yields, affecting the purchasing power of MTL's customers.
According to information available from the Pakistan Stock Exchange (PSX), the company's financial health has been further strained by outstanding sales tax refunds, which have ballooned to Rs. 8.25 billion. This has resulted in severe liquidity issues, necessitating bank borrowing to sustain operations and incurring additional financial costs.
The report also highlights the broader economic context, with declining international oil prices expected to ease Pakistan's balance of payments. As the last quarter of the fiscal year 2024-25 approaches, the country's economy is showing signs of stability and resilience, with tapering inflationary pressures and a strong external sector characterized by a current account surplus, growth in exports, and robust remittance inflows.
The company expressed gratitude towards its Board of Directors, shareholders, vendors, dealers, and employees for their hard work and support during these challenging times.