IMC profit after tax down 70pc to Rs566m in 9 months

KARACHI- The profit after tax of Indus Motor Company declined by 70 per cent to Rs 566 million during the first nine months (March-July) compared to Rs 1.9 billion posted for the corresponding period in 2008 while sales revenue decreased by 15pc to Rs 24.8b versus Rs 29.3b for the same period last year. The decline in sales volume and profitability is mainly attributable to the fall in the Rupee value against major currencies contributing to higher input costs. The Board of Directors of Indus Motor Company (IMC) met on Tuesday to review the companys financial and operating performance for the quarter ended March 31, 2009. The overall sales of the locally assembled Passenger Cars (PC) and Light Commercial Vehicles (LCV) dropped 56pc to 20,856 units for the quarter ended March 31, 2009 as compared to 47,6.38 units sold for the same period last year. On nine months year to date basis, the sales volume was down 46pc to 73,910 units as against 136,587 units sold in the corresponding period of the previous year. The combined sales of IMCs Toyota and Daihatsu brands for the quarter fell 27pc to 9,688 units compared to 13,307 units sold for the same period last year. The company was able to partially cushion the impact of the adverse market environment due to the power of its brand/products including strong recognition of its attributes. IMC also assumed the- number one leadership position in industry on vo1ume with a market share of 41pc for the quarter ended March 2009. On nine months year to date basis, the sales volume at 23,615 units was down 35pc from 36,445 units sold in the corresponding period, while the production to meet falling demand was restricted to 23,805 units versus 34,925 units produced for the same period during 2007-8. The company expects the last quarter April/June09 to remain challenging in view of the economic pressures faced by the country and effects of global recession. However, there are signs of the economy stabilizing and IMC expects the demand for its vehicles to increase especially in rural areas due to the agricultural income cycle and farmer liquidity. The co is appreciative of the Government of Pakistan for providing some relief to the industry in terms of reducing the depreciation allowance for used cars from 2pc to 1pc per month and the waiver of 35pc cash margin requirement. However, to improve industry performance, the government should withdraw 5pc Federal Excise Duty, reduce the Withholding Tax slabs at the registration stage and initiate a dialogue with all stakeholders for renewed implementation of the AIDP (Auto Industry Development Plan).

ePaper - Nawaiwaqt