Karachi: General Tyre on Tuesday said its net profit for the first six months of FY2021 surged to Rs406 million, compared to Rs29.4 million in the same period last fiscal year, mainly driven by government's anti tyre smuggling efforts.
The company in a statement said it recorded net sales of Rs6.45 billion in the reported period, up 41 percent from 4.56 billion rupees in the corresponding period last year.
This resulted in the earnings per share (EPS) of Rs 3.33 against Re0.24 in the same period last year.
This record profit was the result of the company’s focus on the growth of the Replacement Market also known as the aftermarket, which grew by 72 percent as compared to last year value wise.
The company attributed this increase to the steps taken by the Government of Pakistan to curb smuggling in the country.
Hussain Kuli Khan, CEO General Tyre , said, “ Strict surveillance of the borders during Covid-19 played a positive role in the company’s performance”.
“This was the reason that smuggled tyres were not available in the local market, which helped the local industry’s share to grow,” Khan added.
He said Original Equipment Manufacturers (OEM) sales in terms of value grew 23 percent across the board. “They are nearing normal capacity and that also helped the company. The revival of the tractor sales this year is a heartening signal,” the Genral Tyre CEO said.
Besides local demand, the company’s exports also increased 2 times in the reported period and it exported tyres amounting to Rs93.3 million, he said.
“The local tyre industry is still facing problems due to heavy under-invoicing on imports of tyres that is also resulting in revenue losses to the government,” Khan said.
He urged the government to re-evaluate the ITPs value at least twice a year if not every quarter.
He further said the raw material prices had been showing an upward trend since last November and a result freight charges increased manifold.
He hoped that the authorities would further strengthen measures to restrain under-invoicing and smuggling to provide a level-playing field for the local manufacturers.
Khan revealed that the company was in the process of developing new tyre sizes and bringing modern designs for OEMs and the Replacement Market, which would further enhance the company’s leading position in the local tyre industry.
“For example we are going to introduce SUV Radial Tyres of 18 inch rim size and OTR tyres. Meanwhile we are also working on strategies to reduce our operational cost,” said Khan.
He further added that they were confident to exploit the long-term business opportunities while countering the economic challenges.
