KARACHI, Oct 31: The Report and Accounts for the year ended June 30, 2001, released by the company in early October, revealed some shuffling of large blocks of shares.

Up until June 2000, Suzuki Motor Corporation-Japan (SMC) held 35.1m of the total 43.9m shares in Suzuki Motorcycles Pakistan, representing 80.01 per cent of the company equity. However, during financial year 2000-01, around 18m shares were transferred to Pak Suzuki Motor Company Limited, which left direct and indirect shareholding with Suzuki Motor Corporation at 68.86 per cent. “Since Suzuki Motor Corporation is holding 72.83 per cent shares in Pak Suzuki Motor Company, for practical purposes Suzuki Motor Corporation-Japan has full control over Suzuki Motorcycles”, the company said.

Government retains 4.18 per cent stake in Suzuki Motorcycles through Pakistan Automobile Corporation Limited and around a dozen financial institutions hold 7.55 per cent company stock. There are fairly large number of individual shareholders — 4,120, but their aggregate holding is just about 7.8 per cent. The company has called the 38th annual shareholders’ meeting on December 24, at Karachi. The ordinary business listed in the agenda includes the election of seven directors to the board.

Suzuki Motorcycles swung to a pre-tax profit of Rs23.3m in the year ended June 30, 2001, from a pre-tax loss amounting to Rs3.3m the previous year. After tax profit stood at Rs20.6m for the year, which decreased the accumulated deficit to Rs309m.

Net sales for the latest year amounted to Rs567m, which was almost twice the sales of Rs283.8m in 2000.

Motorcycles sales registered growth of 70 per cent to Rs407m, from a year ago sales at Rs239.5m. Chairman Danishmand observed that the motorcycle industry had shown visible signs of recovery during 2000-01, after a previous three year slump. One of the reasons for the increase in sales was stated to be due to increased demand of Suzuki motorcycles by rickshaw makers. The company had introduced a four stroke motorcycle (SD 110), for which it holds high hopes. Wire harnesses being produced for Suzuki cars, were also said to have made a major contribution to the company’s turnover.

Total Motorcycle market size exceeded 110,000 during the year. “While this recovery is a source of satisfaction, we must recognize the hard fact that the market size has not broken through the total sales achieved in 1985”, the chairman said.

Market sources affirm that during the year under review, 78,000 Honda motorcycles were sold, which measured to 70 per cent of the market. Yamaha motorcycles fell way behind with the second largest share of 22 per cent, while Suzuki motorcycles had 5 per cent and the other Chinese brands shared the balance of 3 per cent. The 2000-01 annual report of Suzuki Motorcycles, notes that the actual production stood at 7,455 motorcycles, up from 4,253 motorcycles produced last year; the plant capacity on single shift has been reassessed at 9,000-12,000 units. The company stated that the production was in accordance with the demand. Gross profit for the year ended June 30, 2001 improved to Rs142.5m, from Rs69.3m and the operating profit was up to Rs52.4m, from Rs13.2m.

During 1996-97, the company had offered right shares valuing Rs146.3m that raised its paid up capital to Rs439m from Rs292.7m. The share in Suzuki Motorcycle is currently quoting at huge discount to its par value. The company has still to cover a wide accumulated deficit of Rs309m. It would have to be many more profitable years before the accumulated deficit is covered and the company is able to resume the payment of dividends.

Company chairman observed that the rising sales trend had continued during the current year until September 11. In the face of high degree of certainty since, demand for some consumer durables including motorcycles had registered a sudden slow down. The company was pinning hopes on uncertainty to dissolve before the end of the year.