As per financial results, the corporate posted a loss after tax of Rs941.114million during the period under review as compared to a loss after tax of Rs980.744 million during an equivalent period of last year, showing an improvement of 4.04pc. The company’s sales during the said period decreased 48.49pc, from Rs34.447 billion in 1Q2019 to Rs17.741 billion in 1Q2020.
Hammad Akram, a search analyst at Topline Securities Limited, said that PSMC booked a loss of Rs11.44 per share compared to a loss of Rs11.92 per share in 1Q2019. Akram added that the loss during the quarter came in above industry expectations mainly because of higher finance cost. The analyst said that the gross margins for the quarter clocked in at 3.23pc vs. 3.25pc within the same period last year.
He stated that at the beginning of the quarter, PSMC increased prices of all its variants within the range of 4-7pc which helped the company to take care of its margin of profit, considering higher fixed cost/unit thanks to lockdown within the last eight days of March this year.
Akram shared that for the outgoing quarter, total unit sales were down by 63pc YoY and 37pc QoQ. He opined that the decline in sales was mainly because of higher car prices and interest rates for car financing. “In 1Q2020, finance cost increased by 3.23x YoY because of the company’s higher asset requirements amidst higher inventory levels as sales remain slow,” the analyst said. Akram stated that the company booked a net tax break of Rs384 million in 1Q2020.