Runner posts 55% profit growth in January-March
Three wheeler slowdown still a drag, while motorcycles and commercial vehicles steered the growth
Runner Automobiles Ltd posted Tk0.85 in consolidated earnings per share (EPS) for the January-March quarter of 2021, which is 55% higher than in the same quarter a year ago.
The consolidated profit – the sum of the mother company Runner Automobiles' profits and its Volvo-Eicher commercial vehicle selling subsidiary Runner Motors Limited's profits – is mostly made by the subsidiary.
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Runner Automobiles, engaged in the motorcycle and three-wheeler business, usually contributing around one-third of consolidated revenue, itself posted TK0.7 in EPS for the January-March (third) quarter which was Tk0.02 a year ago.
Runner Chief Financial Officer Shanat Datta told The Business Standard (TBS) that all their business segments suffered disruption since the pandemic began, but two wheelers and commercial vehicles grew up to the end of last quarter.
The real drag was an ongoing slowdown in the three wheeler segment, he said.
Over the three quarters between the two lockdowns in Bangladesh, July 2020-March 2021, Runner registered Tk802 crore in consolidated revenues, which was Tk861 crore in the same period last fiscal year.
The nine-month performance decline was due to a drop in sales over the July-December period though the company increased its consolidated revenue to Tk277 crore in the third quarter from Tk245 crore a year ago.
Except three wheelers, other businesses achieved both year-on-year and quarter-on-quarter growth in the January-March quarter, according to Shanat Datta.
The growth in the latest quarter would have been higher, had three wheeler sales taken off, he said.
Three wheelers are popular across the country but as schools have been closed for a year, fresh demand for the vehicles is still low.
Runner sells Bajaj liquefied petroleum gas-driven three wheelers in Bangladesh, and with its wide dealer and service network across Bangladesh, it is on track to gain higher market shares.
The company is also investing several hundred crore taka to build a three wheeler manufacturing factory at its complex in Mymensingh, under collaboration with India-based Bajaj Auto, the global leader in three wheelers.
Runner is buying lands adjacent to its factory complex for future expansion.
Commercial vehicles recovered a lot with the economic recovery being better than expected since the 2020 shutdown ended in the middle of the year.
Demand for two-wheelers has been spiking often since the pandemic began as people prefer a motorcycle or scooter for safe, social distancing-enabled commuting and they decide on purchasing one as soon as the risk of virus infection increases.
The spikes are not consistent. However, not all the companies can get the best out of the circumstances due to their lack of preparedness in terms of supply and competition amid too many disruptions, according to people in the two wheeler industry.
Runner in the January-March quarter stood on a winning front for sure, since it has huge manufacturing facilities with maximum local value addition among industry players.
