Indus Motors records 21pc increase in annual profit

KARACHI: Profit of Indus Motor Company Limited (IMC) rose 21 percent to Rs15.771 billion for the year ended June 30, translating into earnings per share (EPS) of Rs200.66, a bourse filing said on Tuesday.

IMC also announced Rs3.3 billion in new investment to increase its annual vehicle production to 76,000 units by 2020-21 from around 63,000 a year. “This plan will take the overall investment by the company to around Rs7 billion on improvement of production volumes,” it said in a statement.

IMC earned Rs13 billion with EPS of Rs165.41 during the financial year of 2016/17, a statement to Pakistan Stock Exchange (PSX) said.

The company announced a final cash dividend of Rs45/share, which is in addition to the combined interim dividend of Rs95/share announced earlier paid in three installments of 300 percent, 325 percent and 325 percent.

Indus Motors said it is making efforts to reduce lead time of vehicles through various measures, including debottlenecking of plant, improving production efficiency and working beyond normal working hours.

Demand momentum for automobiles remained solid throughout the period, “due to increased spending power, despite rising fuel prices and accessibility to reasonably priced auto financing”.

“The company operated its manufacturing facilities beyond capacity working daily in overtime hours and off Saturdays to produce 62,886 units,” it said in a statement.

Analyst Ahmed Lakhani at JS Global said growth in annual earnings was due to stronger volumes and higher proportion of premium variants.

“Probably owing to higher ratio of Fortuner sales, gross margins were higher than expectations at 17 percent, largely countering the negative impact of rupee depreciation against the US dollar.” Revenue soared 25 percent to Rs140.207 billion in FY2018.