Locally made three-wheelers propel Runner Auto revenue

Infographics: TBS

Runner Automobiles enjoyed a significant financial turnaround in the October-December quarter of the current fiscal year, primarily driven by an increase in demand for their locally manufactured three-wheelers.

The listed firm achieved substantial growth, with three-wheeler sales exceeding Tk140 crore, marking an impressive increase of over 200% compared to the corresponding period of the previous year.

However, the sales of motorcycles and trucks for Runner Automobiles did not experience similar growth as that of three-wheelers.

During the second quarter of this fiscal year, the total revenue of the company reached Tk216 crore, marking a 49% year-on-year increase.

Shanat Datta, chief financial officer of Runner Automobiles, told The Business Standard, "Since last year, the production of three-wheelers has commenced in our own factory, resulting in a reduction in our dependency on imports. This has enabled us to meet the increasing demand in the domestic market for three-wheelers."

He also said that currently, new CNG licences are not being issued in Dhaka and Chattogram. However, licences are still available for other districts across the country, contributing to the rising demand for three-wheelers.

Runner Automobiles set up a three-wheeler manufacturing plant in collaboration with Bajaj, marking the first-of-its-kind facility in Bangladesh where these vehicles are produced.

The plant is situated on 10 acres of land in Mymensingh, where Runner has spent nearly Tk300 crore to get it up and running. It is said to make around 30,000 vehicles a year.

The completely built units are subject to nearly 100% taxes and duties right now, and Runner's manufacturing plant would bring it down to 53%, according to the company's statement.

During the October-December quarter of this fiscal year, Runner Automobiles made a turnaround, shifting from a loss of Tk13 crore in the corresponding period of the previous year to a net profit of Tk0.52 crore.

Shanat Datta said, "In the last year, we successfully raised funds by issuing bonds in the market, alleviating our working capital shortfall and consequently reducing our finance costs."

"Additionally, the establishment of our local manufacturing facility has played a pivotal role in lowering our cost sector, contributing significantly to the profit generated in the October-December quarter," he added.

However, despite a positive turnaround in the last quarter, the company still incurred losses at the end of the first half of this fiscal year, unable to offset losses from the July-September quarter.

In the July-December period, it reported a loss of Tk27.36 crore.

In June 2023, Runner Automobiles successfully raised $25 million, equivalent to approximately Tk265 crore, by issuing a non-convertible guaranteed bond. This strategic move was aimed at bolstering its eco-friendly three-wheeler business, as disclosed through the Dhaka Stock Exchange (DSE).

The taka-denominated bond, guaranteed by GuarantCo, holds the distinction of being the first-ever Moody's sustainability-certified bond for any Bangladeshi company, as highlighted in the company's financial statement.

Alongside manufacturing a wide range of two-wheeler models under its own brand, it is also assembling and distributing UM, Aprilia, and Vespa two-wheelers and distributing KTM motorcycles in the country.

Runner Motors, a subsidiary of the listed company – is the sole distributor of Eicher trucks in the country.

Runner shares closed 0.26% higher at Tk38.80 each on Wednesday at the DSE.

It could not pay any dividends to its shareholders for the last fiscal year due to incurring a loss of Tk87 crore.