How much profit did “Khavar” take off to take over the market / Iran Khodro Diesel in 1401?
According to Tejarat News, Iran Khodro Diesel Company, a manufacturer of light and heavy trucks, minibuses, vans and buses, has been able to transform and significantly improve its operations in 1401.
Currently, the target market of the company mainly includes government organizations such as the Ministry of Interior and Health, municipalities and large transportation companies. Therefore, Iran Khodro Diesel has not exported any of its products and has targeted domestic trade. However, according to the financial manager of the company, Khavar is going to launch its products on the Russian market soon.
Also, since the sales rate of Iran Khodro Diesel products follows the rates of the Competition Council, it can be said that the jumps in the dollar price only increase the company’s costs and this can affect the company’s profit margin.
In response to Tejarat News reporter, the financial manager of Iran Khodro Diesel Company has emphasized that the company supplies its raw materials from the commodity exchange, but it is the competition council that determines the price for the sale of the company’s products. Based on this, it can be concluded that the shadow of government mandated pricing will continue to weigh heavily on the profitability of Iran Khodro Diesel.
Eastern development plans
Regarding the risk of power outages in summer production, Chenaneh, the financial manager of Iran Khodro Diesel Company, said: “Although this problem is a serious problem, Iran Khodro Diesel was able to prevent production reduction to a large extent by working night shifts in the summer of last year.”
He added: “Besides, next year, the company plans to minimize the risk of power outages by building a power plant at the entrance of the factory, which is powered by gas and diesel.”
According to the financial manager of Khavar, this power plant has the ability to produce 20 megawatts per day. He said in this regard: “Even though the factory’s electricity consumption is more than this amount, the same amount of energy production can also help supply energy to the welding and painting sector, which consumes the most electricity.”
He emphasized: This can help to increase the production capacity and reach the number of 39,000 devices per year.
Contract with Russia
Regarding the production of 12-meter electric buses, Chananeh said: “Currently, the company has the ability to produce 1,000 of these vehicles per shift per year. Also, most likely, during the meeting that will be held next week, Russia will probably order 120 of these buses.”
He added: “The price of each bus is now 11 billion tomans, which is 5 billion tomans more expensive compared to diesel buses.”
Chenane emphasized: “Of course, this product has not yet reached mass production, and as soon as the order is registered and the contract is signed with the buyer, this product only needs 30 days to reach mass production.”
Save the East from collapse
According to the financial manager of Iran Khodro Diesel Company, the situation of this company was critical in the 90s. So that in November 2019, this company reached the point of bankruptcy and the shareholders wanted to liquidate it. Because the accumulated loss was equal to 12 times the capital of the company!
Chenane emphasized: “But gradually in 1400, this company was able to improve its situation with a jump in production and sales and finally taste the profit.” The increasing trend of the company’s production and sales reached a point where Khavar broke the production record of 1987 and captured a 41% share of the market in 1401.
He emphasized: “This increase in production and sales, followed by the profit of Khavar, was able to shake the market value of this company in the stock market; In a way, the value of the Eastern market was about 81 million dollars in 1980, and now it reaches 978 million dollars.
Tax pressure on the East
He said: “One of the financial costs that have been added to the company in recent years is the increase in taxes several times. So that until 1998 and 1999, the tax paid in the East was limited. For example, in 2018, this tax was only 0.05% of the country’s tax budget, but this number has now reached 1.08% of the country’s tax budget!”
Production and sales
It should be mentioned that the investigation of the production and sales process of Iran Khodro Diesel Company shows that the company has produced an average of 1,339 vehicles per month in the past year. But the monthly performance report of Iran Khodro Diesel shows that in April this year, the company did not sell its products as well as it should, and only released 100 of its production units to the market.
The financial manager of this company, explaining the decrease in sales of “East” in April, told Tejarat News that the main reason for the decrease in sales was market conditions and holidays in the first month of the year.
It should be noted that the production amount of the company has decreased by more than 54% in April this year compared to March 1401 and reached 905 units from 1,988 units.
This decrease in production can also be considered partly due to the closure of the first days of the year. But it should be noted that with the increase in the price of the dollar, the production cost of the company has also increased. Also, since the sales rate of Eastern products is high, this reduces the company’s profit margin and causes the gradual increase in production to be economically unprofitable.
East 9 month performance
Examining the financial statement of 9 months ending in December 1401 shows that the company earned a total of 24 thousand 56 billion Tomans from the sale of its products, which has grown by about 336% compared to the same period of 1400. On the other hand, the company’s production costs have also grown by about 350% under the influence of inflation; But as it will be discussed in the following, Khavar was able to register a good performance in this 9-month period by increasing production and sales as well as increasing the price of products.
The growth of the company’s sales amount is mainly due to the 253% growth of the company’s sales amount compared to 9 months of 1400. In this way, the company’s sales reached 12 thousand 78 units from 3 thousand 423 units in 9 months of 1400.
In addition to the increase in the company’s sales, the sales rate of the company’s products also grew by an average of 28%, and these things caused the growth of the company’s total income in the 9 months of this year.
Eastern profiteering
A look at Khavar’s profitability chart indicates that the company has been able to continue this process last year and increase its profitability after exiting from losses in 1400. Because Khavar was able to identify 4 thousand 972 billion Tomans of profit from its operations in this 9-month period, which has experienced a 410% jump compared to the same period in 1400.
In addition, the company was able to increase its net profit to a great extent during this period by controlling and reducing its financial costs. In this way, the net profit of the company in the 9 months of 1401 reached 4,341 billion tomans with a jump of 698% from 544 billion tomans in the 9 months of 1400.
The financial ratios of this company also give good news for the company in this period. Because the company’s net profit margin in 9 months of 1401 was equal to 18.05%, which was recorded as 9.88% in the same period of 1400.
It should be mentioned that Iran Khodro Diesel Company was registered in Tehran Companies Registration Office under the title of Khavar Industrial Group in March 2018. Then, in 1372, it was able to enter the Tehran Stock Exchange and its shares were traded in the automobile and parts manufacturing group.
Finally, four years later, the company changed its name to its current name, Iran Khodro Diesel, and has been operating under the same name until now.
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