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Indus Motors profit down 72% in second quarter of FY23

Indus Motors profit down 72% in second quarter of FY23

Indus Motors profit down 72% in second quarter of FY23

Indus Motors profit down 72% in second quarter of FY23

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KARACHI: The Indus Motors Company Limited (INDU) registered a decline of 72 per cent in its profit-after-tax during the second quarter of the fiscal year 2022/23, a statement issued by the company said on Monday.

The profit-after-tax of the company for the second quarter ended December 31, 2022 fell to Rs1.33 billion, compared with Rs4.75 billion in the same quarter of the last fiscal year.

The company declared earnings per share (EPS) of Rs16.9, compared with Rs60.4 in the same quarter of the last fiscal year.

Analysts at AKD Securities said the cumulative earnings of the company for the first half of the fiscal year have been recorded at Rs2.6 billion, a decline of 74 per cent on a year-on-year (YoY) basis, owing to the dismal gross margins posted in the half.

The net sales of the company clocked-in at Rs49.6 billion, up 33 per cent on a quarter-on-quarter (QoQ) basis, owing to higher effective prices along with a 7 per cent in the off-takes (9,437 units sold), compared with the previous quarter.

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The revenue went down 29 per cent YoY, compared with the same period of the last fiscal year, as although effective selling prices are higher, volumes have shrunk to half of the 19,426 units sold in the second quarter of the fiscal year 2022/23.

The gross margins have shown some recovery, compared with the last quarter but still remain in the negative territory, clocking-in at negative one per cent for the quarter, as the rupee depreciation along with high freight costs keep the selling costs elevated.

The gross margins for the first half of the fiscal year 2022/23 have been recorded at negative 3.3 per cent, while clocking-in at 9.1 per cent for the same period of the last year.

The company posted other income of Rs3.5 billion in the quarter, 38 per cent YoY higher, owing to higher rate of return on investments, while dropping 33 per cent QoQ, as investments declined to Rs99.6 billion by the end of the first quarter of the current fiscal year.

Other income has again provided respite to the earnings, recording at Rs44/share and 1.8x of the profit-before-tax.

The company announced a dividend of Rs10.2/share for the quarter, with the payout ratio, crossing the 50 per cent mark for the first time since the fourth quarter of the fiscal year 2020/21 to clock-in at around 60 per cent. This takes the cumulative payout for the first half to Rs18.4/share to post an annualised dividend yield of merely 4.3 per cent.

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