On February 24, 2022, the Board of Directors of Indus Motor Company (IMC) convened to analyse, evaluate, and declare the company’s financial and operational performance for the half-year ending December 31, 2021.
The Company’s net sales turnover for the half year ended December 31, 2021 increased to Rs. 135.18 billion, up from Rs. 79.65 billion in the previous year’s corresponding period, while profit after tax increased to Rs. 10.18 billion, up from Rs. 4.80 billion in the previous year’s corresponding period. The net profit for the first half of the year increased primarily as a result of higher CKD and CBU volumes, as well as an increase in other income due to larger fund sizes due to increased customer advances.
For the half-year ended December 31, 2021, IMC’s overall market share in the overall market was about 20.4 percent. Furthermore, the Company’s combined sales of locally made vehicles and Completely Built-Up Units (CBU) grew by 46.5 percent to 38,632 units, up from 26,362 units sold the previous year. Demand increased in the first half of the fiscal year, owing to economic growth, decreased auto finance rates, and vehicle price reductions due to a reduction in Additional Custom Duty (ACD) and Federal Excise Duty (FED) beginning in July 2021.
The quarter ended December 31, 2021 saw an increase in net sales turnover compared to the preceding quarter ended September 2021, owing to greater CKD and CBU volumes. Despite a greater quarterly sales, the profit after tax for the current quarter decreased when compared to the previous quarter, owing to higher input costs as a result of the PKR’s depreciation against the USD, higher commodity prices, higher manufacturing expenses, and so on.
“Alhamdolillah, the first half of the fiscal year has been quite strong, which is very encouraging,” Ali Asghar Jamali, CEO of IMC, said. The good impact on revenues was mostly due to the government’s favourable policies and tax measures, which are crucial for a friendly operating climate. We’ve been able to confront every issue head-on, reaching the high expectations our clients demand of us, even as the ever-present COVID danger continues to fade and demand skyrockets.”
He added, “We appreciate Government’s initiative to finalise the new Auto policy with the stakeholders and for maintaining the Hybrid Electric Vehicle incentives. We urge the Government to promote consistent policies for long-term economic growth of the auto sector and provide incentives to local vendors for manufacturing of high tech parts and reduce duties and taxes to support the continued momentum of demand in the auto industry. On the whole, this will generate more taxes for the Government and will also create more employment opportunities.”
The continuing increase in commodity prices, freight charges on imports, currency depreciation, etc. and recent increase in FED by Government, may have a negative impact on the sales volume and profitability of the auto sector in upcoming periods.
The Earnings per Share of the company for half year ended on December 31, 2021 is Rs. 129.45 in comparison to Rs. 61.08 reported in the same period last year. The Board of Directors announced a second interim cash dividend of Rs. 30 per share for the half year ended on December 31, 2021.