Indus Motor Company (INDU) has announced its 2QFY17 financial results, wherein the company posted earnings of PKR3.02bn (EPS: PKR38.51) against PKR3.04bn (EPS: PKR38.77) recorded in SPLY, depicting a meagre decline of 1% QoQ. Hence, Net profitability for the 1HFY17 rose to PKR6.07bn (EPS: PKR77.28), up 3% YoY against PKR5.89bn in 1HFY16 (EPS: PKR75.00). The Board of Directors also announced a cash dividend of PKR25/sh in addition to PKR25/sh already announced in the previous quarter. This takes the cumulative dividend for 1HFY17 to PKR50/sh.
During the quarter, the top-line of the company remained relatively flat at PKR25.68bn, despite a 2% QoQ decline in sales volumes. Corolla sales showed a volumetric growth of 4% QoQ, while Hilux and Fortuner Volumes plunged 40% QoQ and 59% QoQ, respectively. The decline in Hilux and Fortuner volumes can be attributed to a drop in sales before the launch of new models.
Moreover, gross margins improved to 18.3%, depicting a surge of 209bps from 16.2% in the previous quarter. Increased marketing and promotional expenses ahead of the launch of new Hilux Revo and Fortuner models led to a 61% surge in the distribution expenses.