Despite economic challenges, Indus Motor Company vows to become leading customer company in Pakistan

Despite economic challenges, Indus Motor Company vows to become leading customer company in Pakistan

ISLAMABAD: Following the downward trend in the auto sector, Indus Motor Company’s net sales turnover for the 1st quarter of the fiscal year 2019-20 (Q1FY20) decreased by 41pc to Rs20.7 billion as compared to the turnover of Rs34.9 billion in the same period of the last fiscal.

The company’s profit after tax decreased by 62pc to Rs1.32 billion, as against Rs3.51 billion in 1QFY19.

The IMC Board of Directors met on Tuesday to announce the company’s unaudited accounts for the quarter ended September 30, 2019.

IMC’s net profit declined mainly due to a decrease in sales volumes. The company’s combined sales of CKD and CBU units for the period under review decreased by 56pc to 6,839 units, as against 15,560 units sold in the same period last year. IMC’s market share in the overall market stood at approximately 20pc during the first quarter.

The company produced 8,036 units of vehicles for the three-month period, a decrease of 49.7pc when compared with 15,977 units produced in the same period of FY19.

A decline in sales volume was observed in all segments, mainly on account of price impact due to additional customs duty and levy of FED; rise in interest rates also reduced auto financing.

More importantly, fear factor in customers on account of the government’s documentation drive led the customers to hold their expenditure not only in the auto sector but in other sectors as well.

Keeping in mind the market conditions and the economic downtrend, the company observed approximately 30 non-production days (NPDs) to minimise its costs as the best alternative. Further, from the month of October, the company started to operate on a single-shift basis, which is expected to continue until improvement in market demand.

The earnings per share of the company for the first quarter stood at Rs16.78 as compared to Rs44.63 reported during the same period last year. The BOD also declared an interim cash dividend of Rs7 per share for 1QFY20, compared to Rs32.50 per share in 1QFY19.

As per the IMC Chief Executive Officer Ali Asghar Jamali, “Despite the broader macro-economic challenges and higher inflationary environment, IMC is managing the pressure by improving its efficiency, and placing tighter controls on overheads.

“The company remains committed to the ‘Customer First’ philosophy that demands a high level of contribution, dedication and efficiency from all levels in the company, to delight all our valued customers throughout the supply chain.”