Honda Atlas Cars Pakistan Ltd’s (HCAR) has announced its financial results for the first quarter that ended on 30 June 2021.
The car assembler has reported a profit of Rs. 928.22 million as compared to a loss of Rs. 511.02 million that was recorded in the same period last year, which was above the industry expectations due to an increase in sales, higher gross margins, and lower operating expenses.
The sales during the first quarter were up by a massive 234.25 percent to Rs. 21.76 billion as compared to Rs. 6.5 billion that was recorded in the corresponding period last year due to a recovery in auto sales after the easing of the pandemic-induced lockdowns.
The revenues were up due to the 226 percent increase in the sales volume to 7,593 units in the first quarter.
The sales of the company had declined by 4 percent Quarter-on-Quarter led by the volumetric decline of 5 percent clocking in at 7,593 units.
According to a report by Ismail Iqbal Securities, the gross margins on the company were improved by 214bps to stand at 7.3 percent Year-on-Year and 5.2 percent Quarter-on-Quarter primarily due to the appreciation of the Pakistani rupee against the US Dollar and a higher mix of the sales of the Civic.
The company reported a gross profit of Rs. 1.59 billion up by 2481 percent as compared to Rs. 54 million that was posted in the same period last year.
The distribution and marketing expenses had declined by 27 percent to Rs. 132.46 million as compared to Rs. 180.80 million. The other income of the company had increased by 269 percent to Rs. 335.26 million from Rs. 90.93 million due to the increase in the new car bookings. However, Quarter-on-Quarter, the other income had dropped by 35 percent from Rs. 517 million due to the absence of the exchange gain.
The financing cost of the company had decreased by 87 percent to Rs. 11.48 million as compared to Rs. 89.35 million during the period.
The company reported earnings per share of Rs. 6.50 as compared to a loss per share of Rs. 3.58.
HCAR’s scrip at the bourse was closed at Rs. 369.37, down by Rs. 15.12 or 3.93%, with a turnover of 392,300 shares on Thursday.
HCAR hosted a corporate briefing yesterday whereby it announced that the 6th generation Honda City will be debuted in Pakistan on 29 July (today).
It stated that the advent of the new City in a competitive automotive market will bolster its sales further as the vehicle target the mid-tier socio-economic class of buyers.
HCAR’s representatives stated that it is currently operating at full production capacity with the staff working in double shifts to meet the rising demand for the vehicles. They added that the company plans to sell between 8,000 and 9,000 units each quarter in the next three to four quarters.
Regarding the Hybrid and EV segment, HCAR said that the management is concerned about the consistency of Pakistan’s policy for Electric Vehicles (EV) and Hybrid Electric Vehicles (HEV) as the new technology warrants a huge CAPEX. It added that if the policy remains consistent, the company will consider beginning the production of EVs and HEVs in Pakistan.
HCAR announced that it currently has a localization rate of 51 percent and is planning to enhance this figure. It is also planning to enter the crossover SUV segment soon. With this strategy, it intends to grab a larger market share by appealing to a growing customer base for crossover SUVs in Pakistan.