Ayesha Mudassar

Panther Tyres Limited (PTL) posted modest revenue growth as its sales surged by 4.8% to Rs21.4 billion in the last fiscal year 2022-23 from Rs20.4 billion in FY22, WealthPK reports. The growth in the topline reflects the management’s renewed focus on the addition of new countries and products to the export portfolio. The gross profit increased by 36.3% to Rs3.1 billion in FY23 from Rs2.2 billion in FY22, signifying the company’s efforts to manage costs and enhance operational efficiencies. Even though the company's revenue and gross profit exhibited positive growth, the net profit fell by 5.4% to Rs432 million in FY23 from Rs457 million in FY22, indicating an increase in the operating and administrative costs.

Selling and distribution expenses increased from Rs687 million to Rs932 million due to higher marketing and branding spending, which will support the company in achieving its ambitious plans. The financial costs for the fiscal year experienced a significant surge, rising from Rs650 million to Rs1.04 billion due to an increase in the discount rate from 15% to 22%. The company, however, implemented financial discipline to stop the escalating finance cost and to improve efficiency across all the operations. Earnings per share (EPS) decreased in FY23 to Rs2.58 from Rs2.72 in FY22, indicating a dip in the company’s profitability.

The financial year under review turned out to be the most challenging as the country faced depleting forex reserves, currency devaluation and rising inflation. The analysis of the company's financial position showed a growth of 14.4% in its non-current assets during the fiscal year ending on June 30, 2023, compared to FY22. This rise indicates the company’s investment towards enhancing production capacity and overall operations. However, the current assets fell by 20.1% to Rs8.2 billion in FY23 from Rs10.2 billion in FY22. This was the result of a 92% reduction in short-term deposits and 21% in cash balance.

During FY23, the non-current liabilities witnessed a moderate growth of 3.67% compared to FY22. This growth shows that the company took additional long-term liabilities or debt to finance its operations during the year. In contrast, the current liabilities decreased by 12.8% to Rs8.23 billion in FY23 compared to Rs9.45 billion in FY22.

Company profile and future outlook

Panther Tyres Limited, established in Pakistan in 1983, is one of the leading manufacturers and suppliers of auto tyres, tubes, lubricants and spare parts. The company is Pakistan’s top supplier of motorcycle tyres for both the regional equipment manufacturers and replacement markets. The company is likely to face headwinds in the current financial year due to worsening economic conditions and political uncertainty. As a reduction in prices of raw materials (natural rubber, butyl, carbon) is being witnessed at the global level, this would help the company partially offset the adverse impact of rupee-dollar disparity. The management of the company is aware of these challenges and engaged in devising strategies to address them.

Credit: INP-WealthPk