Lahore: Millat Tractors Limited (MTL), a key player in Pakistan's agricultural machinery sector, has reported a significant decline in its sales for the quarter ending September 30, 2024. The company released its interim financial statements along with consolidated results for the Millat Group of Companies.

The interim financial report highlighted a stark decrease in tractor sales, which fell to 2,566 units from 7,187 units in the same quarter the previous year, marking a 64.3% reduction. In financial terms, sales plummeted from Rs. 20.76 billion to Rs. 7.83 billion, a drop of 62.13%. This decline was primarily due to challenges stemming from the newly implemented sales taxation regime under the Finance Act 2024. According to information available from the Pakistan Stock Exchange (PSX), the changes in tax legislation have introduced multiple ambiguities, adversely impacting the company's sales.

Despite the economic challenges facing the sector, Millat Tractors observed some positive indicators in Pakistan’s economy overall. The country has experienced a drop to single-digit inflation, increased industrial output, growth in major exporting sectors, and advancements in agricultural practices. These factors contributed to a more optimistic export outlook and a shrinking current account deficit. The financial sector has remained stable, with a gradually declining policy rate, and the stock market showing an upward trend.

Although domestic sales suffered, MTL saw a significant boost in its export sales, which surged by 142.2% to 671 units, compared to 277 units in the corresponding period last year. The company remains hopeful for the future, citing support from its principals and the ongoing economic recovery in Pakistan.

Additionally, MTL is facing challenges with withheld sales tax refunds, which have escalated to Rs. 7.86 billion, exacerbating the company’s liquidity issues and necessitating increased borrowing. The company has appealed to the government to review its taxation policies to foster a more business-friendly environment.

In terms of corporate developments, a merger proposal for Millat Tractors Limited with Millat Equipment Limited is currently under review by the Lahore High Court.

The company expressed gratitude towards its board of directors, shareholders, vendors, dealers, and employees, acknowledging their efforts despite the challenging circumstances.