Indus Motor announces financial results for Q3, 20089 - Apr 21, 2009 The Board of Directors of Indus Motor Company Ltd. (IMC), met on April 21, 2009 to review the company’s financial and operating performance for the quarter ended March 31, 2009. Pakistan Automobile Market The overall sales of the locally assembled Passenger Cars (PC) and Light Commercial Vehicles (LCV) dropped 56% to 20,856 units for the quarter ended March 31, 2009 as compared to 47,638 units sold for the same period last year. On nine months year to date basis, the sales volume was down 46% to 73,910 units as against 136,587 units sold in the corresponding period of the previous year. Company Operating Performance The combined sales of IMC’s Toyota and Daihatsu brands for the quarter fell 27% to 9,688 units compared to 13,307 units sold for the same period last year. The Company was able to partially cushion the impact of the adverse market environment due to the power of its brandproducts including strong recognition of its attributes. IMC also assumed the number one leadership position in industry on volume with a market share of 41% for the quarter ended March 2009. On nine months year to date basis, the sales volume at 23,615 units was down 35% from 36,445 units sold in the corresponding period, while the production to meet falling demand was restricted to 23,805 units versus 34,925 units produced for the same period during 20078. The Company’s sales revenue for the nine months ended March 31, 2009 decreased 15% to Rs 24.8 billion versus Rs 29.3 billion for the same period last year, while the profit after tax declined substantially to Rs 566 million, down 70% compared to Rs 1.9 billion posted for the corresponding period in 2008. The decline in sales volume and profitability is mainly attributable to the fall in the Rupee value against major currencies contributing to higher input costs. Near Term Business Outlook The Company expects the last quarter AprilJune’09 to remain challenging in view of the economic pressures faced by the country and effects of global recession. However, there are signs of the economy stabilizing and IMC expects the demand for its vehicles to increase especially in rural areas due to the agricultural income cycle and farmer liquidity. The Company is appreciative of the Government of Pakistan for providing some relief to the industry in terms of reducing the depreciation allowance for used cars from 2% to 1% per month and the waiver of 35% cash margin requirement. However to improve industry performance, the Government should withdraw 5% Federal Excise Duty, reduce the Withholding Tax slabs at the registration stage and initiate a dialogue with all stakeholders for renewed implementation of the AIDP (Auto Industry Development Plan).