IMC profit surges amid plant shutdowns

KARACHI: Indus Motor Company Ltd (IMC) on Monday announced the temporary suspension of production activities from Oct 29-31 due to a parts shortage.
In a stock filing on Monday, the company said it is experiencing low levels of raw materials and components inventory and facing ongoing supply chain challenges. As a result, the company is unable to meet its production requirements.
IMC had kept its plant shut from July 15-22, Aug 6-8 and Sept 26-30 this year for parts shortages.
Despite production closures, the company’s net sales turnover increased by 27 per cent to Rs41.6 billion for the quarter ended Sept 30 from Rs32.6bn in the same period last year due to increase in sales volumes of CKD units, driven by a slight recovery in demand and the successful launch of the Toyota Yaris with minor model change.
Profit-after-tax rose by 58pc to Rs.5.091bn from Rs3.216bn in the same period last year due to the reduction in input material costs because of positive exchange rate movement, cost reduction measures and additional localisation of parts. Moreover, an increase in other income contributed to the positive results, mainly because of higher fund size and investment return.
IMC chief executive officer Ali Asghar Jamali said 1QFY25 witnessed economic progress in improving the trade balance, reducing the current account deficit and inflation. However, challenges remained due to high taxes and duties that drive up vehicle prices, underscoring the need for reforms to enhance consumer affordability.
He urged the government to lift restrictions on auto financing, lower financing rates, and rationalise vehicle duties and taxes. These measures will improve government revenue, generate employment and facilitate greater localisation of parts and components, thereby saving foreign exchange.
The earnings per share for the quarter surged to Rs64.77 compared to Rs40.9 in the same period last year. The board of directors declared a first interim cash dividend of Rs39 per share.
Published in Dawn, October 29th, 2024