Pak Suzuki returns to profit after two years

Earned Rs1 billion in the fourth quarter of 2020

Pak Suzuki reported profit of Rs1 billion in the fourth quarter (October, November and December) of 2020 after two years.

“The company was in loss for eight quarters (two years),” JS Global’s Senior Research Analyst Ahmed Lakhani said. “It returned to profit in the fourth quarter, which was well above market expectations.”

Dissecting the financial results of the company, Lakhani said the profit was due to big surge in gross margins, 70% lesser administrative expenses as compared to the same quarter of the previous year, 451% increase in other income and 73% reduction in finance costs due to massive deleveraging of its balance sheet. 

The analyst expects the company to report volumetric growth in number of units sold during the first quarter of calendar year 2021. Cheaper dollar may also increase the company’s profit, he believes.

According to Topline Securities, Pak Suzuki’s revenues increased by 18% on a quarter-on-quarter basis due to 17% growth in unit sales.

auto sector

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