Pak Suzuki Motor Company announced a 15-day extension to the longest motorbike plant shutdown to date.
The company stated that its motorcycle plant will be closed until the middle of April in a notice sent to the Pakistan Stock Exchange (PSX), citing an inventory shortfall brought on by import restrictions in the country.
Since March 20, the business had observed non-production days for bikes, which it kept up for another two weeks while considering the problems facing the sector.
The two-wheeler manufacturer stated that “the management of the company has decided to extend the shutdown period of its motorcycle plant until April 15, 2023.”
Due to a low inventory level, the auto plant would also observe shutdown on April 7 and April 14, it was noted.
The business assembles, manufactures, markets, and distributes Suzuki cars, pickup trucks, vans, 4x4s, motorcycles, and associated spare parts locally. The Suzuki name, on the other hand, is Japanese.
The fiscal situation in Pakistan is at its worst. On the one hand, the nation is struggling to secure an International Monetary Fund (IMF) agreement because there aren’t enough foreign investments coming in from other countries, and on the other, it only has $4.24 billion in reserves (as of March 24, 2033). in its central bank.
Banks allegedly refuse to open letters of credit (LCs) for items that are not “essential” due to alarmingly low foreign reserves and a lack of US dollars.
The nation’s import-dependent car industry has been impacted by the economy as many businesses have been taking regular production breaks and blaming inventory shortages.
For many months, Honda Atlas has also observed non-production days, and the company’s facility will remain closed until April 15. The business claimed that it had been forced to reduce production days due to the country’s present economic situation and commercial banks’ inability to support imports of the auto industry.
In contrast to the previous year’s profits of Rs2.679 billion, Pak Suzuki recorded a net loss of Rs6.336 billion in 2022. For the specified time, the company didn’t make any payments. In 2022, there was a loss per share of Rs. 77 as opposed to a profit per share of Rs. 32.56 the previous year.
Pak Suzuki saw an increase in income for 2022, going from Rs160.082 billion to Rs202.466 billion. The price of sales, however, also rose, from Rs151.911 billion in 2021 to Rs190.782 billion in 2018.
The business reported that its finance costs for the time period increased to Rs11.614 billion from Rs737.041 million the year prior, turning earnings into losses.
The company’s outstanding foreign liabilities, which were $184 million at the end of 2022 but grew to $218 million, and an exchange loss of Rs3.55 billion on transactions and balances in foreign currencies were disclosed by Pak Suzuki’s company secretary.
According to the company secretary, the rupee-dollar parity continued to decline in 2022, causing a sizable unrealized loss that could have an effect on the company’s stock in 2023.
For the causes listed above, Pak Suzuki saw a decline in car sales in February of 67% month over month and 92% year over year.