Runner Auto keeps bleeding amid two-wheeler, truck sales slowdown
Runner Automobiles Ltd incurred losses for the third consecutive quarter in the January-March period due to a significant slowdown in both its major segments: two-wheelers and trucks.
Its loss per share stood at Tk1.41 for the last quarter, compared to earnings per share of Tk0.78 in the same quarter a year ago.
In the October-December quarter, its loss per share stood at Tk2.08.
The company's consolidated loss per share stood at Tk4.31 for the first nine months of the current fiscal year, compared with a positive EPS of Tk2.27 over the same period of the previous fiscal year.
Keep updated, follow The Business Standard's Google news channel
Consolidated figures include those of the subsidiary companies. Runner Motors, which sells Eicher trucks, is a subsidiary of the country's two-wheeler manufacturing pioneer, Runner Automobiles.
The sales slowdown
"It was a tough quarter for our two-wheeler and truck business," said Runner's Chief Financial Officer (CFO) Shanat Datta.
In the January-March period, the company's consolidated sales were Tk174 crore, up from Tk145 crore in the previous three months but 43% down from Tk303 crore in the same period the previous year.
The company slightly gained share in the slowed down motorcycle market because of its affordable models, which were preferred by inflation-hit customers. However, the number of units sold in the January-March period was still 45% lower compared to the same period last year and 40% lower than the previous quarter.
On the other hand, truck sales in the March quarter were 30% lower year-on-year and 10% lower quarter-on-quarter, according to Datta.
Truck owners have been hit hard by the import slowdown since the foreign currency reserve crisis that started in mid-2022. Also, a new truck purchase was not an option for most of the existing truck owners, and the corporates were not buying as many trucks either.
Locally made three-wheelers shine
Shanat Datta told The Business Standard, "Runner's three-wheeler manufacturing plant, which went into production in February, helped the Bajaj branded three wheelers' sales grow by 30% as customers got some price benefits."
However, the opening of the letter of credit for imports was not convenient enough, and the three-wheeler plant was not able to cater to the full demand.
Besides, the three-wheeler segment alone was far from offsetting the slowdown and losses in the two major segments, said the CFO, adding that the three wheeler unit was profitable in its first quarter after local manufacturing.
Inching up sales and maintaining cost control helped the company minimise losses in the January-June period, and the trend should continue, said Datta.
But the fiscal 2022-23 was unlikely to be a profitable one for Runner, and the company eyes a better business in the next fiscal year with the help of electric bikes and three-wheelers.
Runner's consolidated net asset value per share stood at Tk61.2 at the end of March.
Its shares, which had a face value of Tk10 each, closed at the floor price of Tk48.4 at the Dhaka Stock Exchange on 18 April.
Runner manufactures and sells two-wheelers under its own brand Runner, the Indian brand LML, the American brand UM, the Italian Vespa, and the Aprilia brand. It also sells motorcycles under the Austrian brand KTM.
