IMC profit drops 63pc in FY20

KARACHI: The Indus Motor Company (IMC) profit declined 63 percent to Rs5.082 million for the year ended June 30, 2020, translating into earnings per share (EPS) of Rs64.66, a bourse filing said on Monday.

The company earned Rs13.714 million with EPS of Rs174.49 last year. It announced final cash dividend for the year ended June 30, 2020 at Rs7/share which was equivalent to 70 percent. This is in addition to the combined interim cash dividend already paid at Rs23/share, equivalent to 230 percent, the statement said.

Shajar Capital in their research noted, “The decline in earnings of the company was mainly the result of rise in financial cost by 27 percent YoY, other income declined by 26 percent YoY, gross margins declined by 350bps and sales revenue declined in FY20 by 45.46 percent YoY to Rs86.17 billion.”

The decline in gross margins mainly occurred due to decline in sales volume of the company by 59 percent to merely 27,000 units in FY20 compared to FY19 sales volume of 65,000 units, the report added.

Despite decline in rupee-dollar parity in FY20 by 15 percent, averaged at Rs158.81/dollar, the cost of sales of the company has notably declined by 43 percent YoY to Rs78.72 billion in FY20 compared to FY19 cost of sales of the company.