The company is facing a difficult situation with sales decreasing significantly in all segments.
Runner Automobiles, a pioneer in Chinese motorcycle manufacturing and export, suffered its first loss last year due to the economic slowdown and high inflation.
The company is facing a difficult situation with sales decreasing significantly in all segments of motorcycles, three-wheelers, and commercial vehicles. This resulted in a large loss of Tk 96 million on a consolidated basis.
Shanat Dutta, chief financial officer of Runner Automobiles, told Business Standard: “The company suffered losses at the start of operations, but the severity of the losses was not that high.”
“Due to the continuing economic crisis, many people are postponing the purchase of a new vehicle.As a result, sales of two-wheelers in FY2023 were about 50% compared to the previous year, sales of three-wheelers were 40%, and sales of commercial vehicles were “It’s down 35% in 2019,” he added.
Inflation has had a major impact on two-wheeler sales and the target customers of this sector are middle class or lower middle class individuals who are struggling to meet their daily needs amidst rising costs and purchasing decisions. leading to the postponement of
He said that overall the growth rate of the automotive sector has fallen by 35%.
The listed engineering company will not pay dividends to shareholders as it has been unable to maintain profitability. This is the first time that a company has failed to list since its stock listing in May 2019.
In the previous financial year, it paid a 10% cash dividend to shareholders.
Runner Automobiles is engaged in manufacturing Runner, UM and Piaggio motorcycles. Moreover, the company is also the sole distributor of his KTM motorcycles, Bajaj three-wheelers and Eicher commercial vehicles in the country.
Consolidated figures include figures from subsidiaries such as Runner Motors, which sells Eicher trucks and is a subsidiary of Runner Automobiles, a pioneer in domestic motorcycle manufacturing.
Runner Automobiles made a consolidated net profit of Tk 460 million in FY22, but suffered a quarterly loss in FY23. As a result, the runners suffered heavy losses at the end of the year.
Runner Automobiles’ consolidated sales in 2022-23 decreased by 40% to Tk 663 million from Tk 1,112 million in the previous year.
The financial situation for runners is currently worse than the crisis they faced during the coronavirus pandemic. According to its financial report, Runner had a revenue of Tk 964 million and a profit of Tk 34 million in FY20.
However, in the subsequent two financial years, the revenue exceeded Tk 100 billion and the company also reported a profit of around Tk 50 billion.
“We are receiving good demand for three-wheelers from our customers, but the opening of import letters of credit is not convenient enough and due to foreign exchange fluctuations, we are unable to supply as per the demand,” said Shanat Dutta.
In its disclosure on Thursday, the company reported a consolidated loss per share of Tk7.75 for FY23. While the earnings per share (EPS) for the previous financial year was Tk 2.40, the consolidated net asset value per share decreased to Tk 62.66 and the consolidated net operating cash flow per share was Tk 38.32.
The disclosure explains that this discrepancy is due to a decline in revenue due to lower unit sales in the two-wheeler, three-wheeler and commercial vehicle segments, which will ultimately result in negative profit.
Net operating cash flow increased due to improved network utilization and increased cash sales and sales advances. Negative growth in profitability reduces net asset value per share.
The annual general meeting will be held on December 21st through a digital platform, with the record date for identifying shareholders fixed at November 19th.
