Pak Suzuki Motor Company (PSMC) continues to face operational hiccups, forcing it to announce another round of non-production days (NPDs) in May 2023.
In an official notice to the Pakistan Stock Exchange (PSX), the company cited inventory shortage as a reason for the car and bike assembly plant shutdown, which will take place from May 2 to May 9, 2023.
The notification is as follows:
Biggest Loss in History
Pak Suzuki Motor Company Limited (PSMC) has announced its highest-ever loss after tax (LAT) of Rs. 12.91 billion in the first quarter that ended on March 31st, 2023 (1Q2023). The company reported a loss of Rs. 460 million in the same period last year.
The result was due to higher-than-expected finance costs. Finance cost which includes exchange loss, markup on late delivery, and demurrage and detention charges was up 12x year on year and 3x quarter on quarter to Rs. 12.8 billion.
The net sales of the company decreased by 54 percent year-on-year (YoY) to Rs. 21.8 billion as compared to Rs. 47.7 billion last year amid subsequent price hikes and production slowdowns in the past few months.
Intermittent production shutdowns since last year and the unavailability of completely knocked down (CKD) kits are one of the main reasons for the heavy losses incurred by PSMC during Q1.
The majority of automakers have blamed the State Bank of Pakistan’s (SBP) reluctance to approve letters of credit (LCs) for the clearance of imported goods, which has forced plants to close production.