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Profits of the country’s automobile manufacturers and assemblers have slumped significantly in the first nine months of the current fiscal year, thanks to higher production costs, restriction on car imports, and the overall economic slowdown.
The industry, already affected by the pandemic, has faced a fresh blow due to the ongoing Russia-Ukraine war, as the war effects have made business operations tougher because of the exorbitant rise in production costs caused by the costly dollar.
Besides, due to the restriction on the opening of the letters of credit (LCs) amid the severe dollar crisis in the country, car importers could not supply cars in the market, affecting their profitability severely.
Moreover, owing to the rising inflation, the capacity of consumer spending also got compressed, leading to a decline in sales of the automobile companies.
Ifad Autos
Ifad Autos, a market leader in the country’s automobile industry, incurred a net loss of Tk 7.91 crore in the first nine months of FY23.
The company had registered a net profit of Tk 56.93 crore in July-March period of the last fiscal.
Although the car manufacturer and assembler’s profits got compressed in the first three quarters of the current fiscal year, its revenue rose by Tk 41 crore or 6.0 per cent in the July-March of FY23 on a year-on-year basis.
The listed company logged revenue of Tk 715 crore in the first three quarters of the fiscal 2022-23, against Tk 674 crore in the same period last fiscal.
The car maker’s earnings per share stood at Tk 0.30 negative in the July-March of FY23, against Tk 2.14 in the same period last year.
Runner Automoblies
Runner Automoblies, a subsidiary of Runner Group, logged revenue of Tk 549 crore in the first nine months of the current financial year, against Tk 853 crore in the same period fiscal.
This implies that the local car maker’s revenue declined by 35.6 per cent or Tk 304 crore in the July-March period of FY23 year-on-year.
Meanwhile, the listed company suffered a loss of Tk 52.51 crore in the first three quarters of the fiscal year 2022-23, whereas it had generated a profit of Tk 44.40 crore in the corresponding period last fiscal.
Its earnings per share (EPS) fell to Tk 4.31 negative for July-March FY23 from Tk 2.27 for the same period of FY22.
As per its financial report, the reason for the decrease in profits this fiscal was due to the depletion in earnings caused by the rising raw materials prices.
Commenting on the issue, Shanat Datta, chief financial officer at Runner Automoblies told The Business Post, “The company’s earnings decreased year-on-year in the first three quarters of the current fiscal year due to the declining consumer purchase capacity amid the rising inflation, as well as costly US dollar, causing a massive jump in production costs.”
“Besides this, the restriction on the LC opening also hampered our profitability exponentially,” he added.
Aftab Automoblies
Aftab Automoblies Ltd achieved revenue of Tk 94 crore in the first nine months of FY23, againstTk 44 crore during the same period last fiscal.
The company reported a net profit of Tk 0.47 crore in the July-March FY23, against a net loss of Tk 6.85 crore in the same period last year.
The listed firm’s earnings per share (EPS) stood at Tk 0.04 for
July-March FY23, versus a loss per share of Tk 0.65 for the corresponding period of FY22.
The principal operation of Aftab Automobiles during the period was the assembling of Toyota Land Cruiser soft tops/ Pick-ups, Land Cruiser Prado, and Hino Bus, Hino Mini Bus/ Truck.
On condition of anonymity, an official of Aftab Automoblies Ltd told The Business Post, “The company’s business was badly affected in the last financial year due to the impact of Covid-19 pandemic. After the epidemic passed, the demand for our vehicles increased in the country’s market.”
“The increase in construction of roads and infrastructures like the Padma Bridge bumped up our sales. For this reason, our income increased in the first nine months of the current fiscal year on a year-on-year basis.”
