Corporate Briefing Notes
Service Industries Limited (SRVI) held its corporate briefing session to discuss the financial results for CY22 and its future roadmap.
Key Highlights
● Net sales of the company grew by 30% YoY to PKR43bn during CY22 compared to PKR33bn in SPLY. Main Segments of revenue are Tyre & Tube (66%), Footwear (26%), Service Genuine Parts (7%) and Technical Rubber Products (1%). Whereas, sales mix of the company accounted at PKR38bn local and PKR5b export in CY22.
● The company has leading market share in motorcycle Tyre and Tube along with largest exporter of Tyres and Tubes from Pakistan. Moreover, the company has 3rd largest market share in Motorcycle spare parts.
TYRE AND TUBE SEGMENT
● Revenue in this segment clocked in at PKR28bn during CY22. The company has almost 49% market share in Pakistan OEMs market.
● Being the largest exporter of tyres and tubes, the company exports amounted to PKR 3.5bn (USD17mn) with reach over 30 countries across Europe, Asia, Africa, South America, and North America. Notably, SIL’s exports of tyres and tubes account for 53% of Pakistan’s total exports in this category, excluding TBR tyres.
● Moreover, during CY22 the company successfully installed State of the art mixing plant that increase mixing capacity by 72tons per day.
FOOTWEAR SEGMENT
● Footwear Segment revenue recorded at PKR12bn that came from Exports, Local – institutional & Wholesale and Retail.
● Export sales of footwear amounted to PKR2bn in the said period. The company is continuously expand its exports destinations across various regions, including Europe, Asia, Australia, Russia, and the USA.
● The Company’s retail segment achieved phenomenal results in CY22 as sales revenue marked PKR5bn during the period. In CY22, the company opened 61 more retail outlets, taking total number to 152 by end of Dec’22. However, the number of stores as of May 2023 stand at 184.
SERVICE GENUINE PARTS SEGMENT
● Service Genuine Parts segment posted a revenue of PKR3bn in the year 2022.
● The company has started its own manufacturing of motorcycle chains from July 2022 and sprockets from November 2022.The annual capacity of the project stands at 3 million for chains and 2.4 million for sprockets, respectively.
● The management expects the sale target of PKR2bn in CY23 from manufacturing of chains and sprockets. Margins are also expected to remain high due to in-house manufacturing in comparison to trading business.
Future Outlook
● Going-forward, current macro-economic situations followed by high inflation, rising interest rates, PKR depreciation and political instability are negatively impacting the industry in various aspects. The company’s management is attentively monitoring the latest developments along with potential opportunities in the market and also managing all known risks that may pose threat to company’s profitability
Important Disclosures
Disclaimer:
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