ISLAMABAD: Following the downward trend in the auto sector, Indus MotorCompany’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 ofRs34.9 billion in the same period of the last fiscal.
The company’s profit after tax decreased by 62pc to Rs1.32 billion, asagainst Rs3.51 billion in 1QFY19.
The IMC Board of Directors met on Tuesday to announce the company’sunaudited accounts for the quarter ended September 30, 2019.
IMC’s net profit declined mainly due to a decrease in sales volumes. Thecompany’s combined sales of CKD and CBU units for the period under reviewdecreased by 56pc to 6,839 units, as against 15,560 units sold in the sameperiod last year. IMC’s market share in the overall market stood atapproximately 20pc during the first quarter.
The company produced 8,036 units of vehicles for the three-month period, adecrease of 49.7pc when compared with 15,977 units produced in the sameperiod of FY19.
A decline in sales volume was observed in all segments, mainly on accountof price impact due to additional customs duty and levy of FED; rise ininterest rates also reduced auto financing.
More importantly, fear factor in customers on account of the government’sdocumentation drive led the customers to hold their expenditure not only inthe auto sector but in other sectors as well.
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Keeping in mind the market conditions and the economic downtrend, thecompany observed approximately 30 non-production days (NPDs) to minimiseits costs as the best alternative. Further, from the month of October, thecompany started to operate on a single-shift basis, which is expected tocontinue until improvement in market demand.
The earnings per share of the company for the first quarter stood atRs16.78 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 thebroader macro-economic challenges and higher inflationary environment, IMCis managing the pressure by improving its efficiency, and placing tightercontrols on overheads.
“The company remains committed to the ‘Customer First’ philosophy thatdemands a high level of contribution, dedication and efficiency from alllevels in the company, to delight all our valued customers throughout thesupply chain.”
