KARACHI: Pakistan’s largest automaker Pak Suzuki has announced a net profit of Rs1.93 billion in year 2014, showing growth of 4% as compared to Rs1.85 billion it earned in year 2013.
According to BMA Research, the increase in profits was primarily driven by 140 basis points expansion in margins while the company sales also increased by 5%, backed by an increase in volumetric sales. However, the profits earned by the company were lower than market expectations.
Earnings per share (EPS) increased to Rs23.35 in 2014 as compared to an EPS of Rs22.37 in 2013. The result was accompanied by a final cash dividend of Rs5 per share for CY14.
The earnings remained lower than our expectation, as the entity likely booked inventory losses owing to sharp decline in steel prices,” stated Sherman Securities in its analysis. Global Research even predicted on Tuesday that Pak Suzuki would report a profit of Rs2.24 billion, up 21% compared to CY13.
In the fourth quarter (Oct-Dec) of CY14 alone, the company posted an EPS of Rs3.8 compared to an EPS of Rs4.51 in third quarter of CY14, down 16%.
Meanwhile, 41% decline in other income to Rs510 million slightly restricted the impact of a better margin. The decline in other income is due to a higher base affect, as last year, Pak Suzuki booked a one-time gain on disposal of an old motorcycle plant amounting to Rs274 million – with an EPS impact of Rs2.
