Loads Limited Reports Improved Earnings Amid Decline in Topline

Karachi: Loads Limited reported a 4% decline in its topline for FY24, recording PkR4.4 billion compared to PkR4.5 billion in the previous fiscal year, attributed to reduced sales volume in the slowing auto industry. However, despite the decrease in revenue, the company turned a profit of PkR287 million (EPS: PkR2.65), reversing a loss of PkR1.7 billion (LPS: PkR5.339) in FY23, largely due to successful pricing negotiations with original equipment manufacturers (OEMs).

According to AKD Securities Limited, the company’s earnings for the first quarter of FY25 rose to PkR25 million (EPS: PkR0.31) from a loss of PkR190 million (LPS: PkR0.51) in the same period last year. Gross margins improved to 26% following price adjustments for sheet metal and exhaust systems, which comprised 59% and 38% of the sales mix, respectively. The sales breakdown further revealed Suzuki’s contribution at 56%, Indus at 24%, and Honda at 14%, with the aftermarket segment accounting for 1%.

Looking ahead, the management of Loads Limited projects an increase in volumes driven by declining auto financing rates and a stable currency, which are expected to stimulate the auto sector. The company aims to achieve sales of PkR7 billion for FY25. They also highlighted ongoing negotiations with major OEMs, although many new OEMs are capitalizing on duty concessions under the AIDEP until June 2025, prompting a shift towards localization.

The company intends to redirect focus towards the aftermarket segment, previously hindered by financial constraints. Additionally, the Hi-Tech alloy-wheel plant, currently 90% complete, is up for sale with an agreement already in place with the Bank of Punjab (BOP), expecting finalization within six months. The management also noted challenges in maintaining a minimum two-month inventory due to working capital management issues.

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