Honda Atlas Cars Announces a Massive Turnaround in 3rd Quarter

Honda Atlas Cars Pakistan Ltd. (HCAR) announced its financial results for the third quarter that ended December 31, 2020.

The company has reported a profit of Rs. 751.80 million during the 3rd quarter. It had reported a loss of Rs. 41.25 in the same period last year. During the first nine months, the profits of the company grew by 26.40 percent to Rs. 897.65 million as compared to Rs. 710.15 million.

During this quarter, the company sales bounced back massively by 80 percent to Rs. 17.64 billion as compared with Rs. 9.86 billion recorded in the same period last year, with multiple price hikes. The cost of sales was reported at Rs. 16.49 billion, up by 80 percent compared to Rs. 9.21  billion. This took the gross profits to Rs. 1.15 billion, up by 78.02 percent compared to Rs. 646 million.


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Gross margins slightly fell to 6.5 percent in 3QMY21 against 6.8 percent in 3QMY20. There was an increase in freight costs due to COVID-induced supply chain disruptions, and a lower than expected share of Civic could be the likely cause of the decline. On the other hand, net margins surged to 4.3 percent in 3QMY21 from -0.4 percent in 3QMY20 due to a massive reduction in finance cost.

The main reason behind the increase in profits is growing sales as the volumes bounced back by 69 percent due to attractive auto-financing rates and the release of pent-up demand post lockdown and lower finance costs.

Units Sold (Oct 2020-Dec 2020)
Models Units Sold in 2020 (3QMY21) Units Sold in 2019 (3QMY20) Difference
Civic and City 5,475 2,990    83.11%
Honda BR-V 756 699    8.15%
Total 6,231 3,689    69%


During the third quarter, Honda Cars sold 6,231 units compared to 7,435 units sold during the previous quarter, which was 16 percent lower due to the entrance of new players and their new models.

However, the other income of the company increased by 23x or 2301.87 percent during the quarter to Rs. 244.03 million as compared to Rs. 10.1 million in the same period last year due to the increase in new car bookings.

Distribution and marketing costs decreased by 63 percent to Rs. 89.90 million compared to Rs. 241.37 million during the period under view. Administrative expenses increased to Rs. 206.61 million compared to Rs. 172.64 million.

Due to a decrease in interest rates during the period, the financing cost of the company decreased by 90 percent to Rs. 33.37 million as compared to Rs. 322 million during the quarter.

Earnings per share of the company were reported at Rs. 5.26. It had reported a loss per share of Rs. 0.29 in the corresponding period.


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HCARS’s share at the bourse closed at Rs. 317.60, up by Rs. 6.02 or 1.93 percent, with a turnover of 496,300 shares on Wednesday.

In December 2020, Honda Atlas Cars sold only 1,764 vehicles in December 2020, recording an MoM sales decrease of 21 percent and YoY increase of 76 percent.

With that taken into account, although the quarterly figures might show signs of progress, the automaker continues to struggle monthly, especially after the introduction of some newer choices in the market.

At the same price point as a 2-generations-old City, there are now two newer options in the form of the new Yaris and the Changan Alsvin sedan. Whereas at the same price point as the Civic, there are now plenty of choices, namely, Kia Sportage Alpha, DFSK Glory 580, Proton X70, and the new MG ZS 1.5, all of whom are bigger, better-equipped vehicles.

With that said, Atlas Honda still has to pull out some new offerings from its arsenal to stay relevant in the rapidly shifting automotive industry of Pakistan.

With additional input by Waleed Shah

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