Honda Atlas Cars Pakistan Ltd. (HCAR) has announced its financial results for the first quarter that ended June 30, 2023.
In a notification to the Pakistan Stock Exchange, the company reported a profit after tax of Rs. 144.9 million during Q2 2023, down 78 percent Year-on-Year (YoY) from the same period of the previous financial year when it reported a profit after tax of Rs. 658.2 million.
Deputy Head of Research at JS Global Waqas Ghani told ProPakistani,
Main reason for this decline in gross level profitability is a reduction in sales volume resulting from hindered production. Throughout the quarter, HCAR experienced 45 days of plant shutdown due to supply chain issues arising from import restrictions.
During April-June 2023, sales decreased by a whopping 87.5 percent to Rs. 3.77 billion as compared to Rs. 30.24 billion recorded in the same period last year.
The cost of sales was reported at Rs. 3.91 billion, down by 86.2 percent YoY compared to Rs. 28.33 billion in Q2 2022. This took the gross losses of the company to Rs. 148.3 million, compared to Rs. 1.91 billion gross profit reported in the same period last year.
Meanwhile, the other income of the company increased by 71.4 percent YoY during the quarter to Rs. 902.6 million as compared to Rs. 526.6 million in the same period last year.
Distribution and marketing costs decreased by 42.2 percent in the period under review to Rs. 140 million compared to Rs. 242.1 million in the same period last year. Similarly, administrative expenses dipped by 18.2 percent to Rs. 271.9 million compared to Rs. 332.6 million in Q2 2022.
Also, the financing cost of the company jumped 120.8 percent YoY to Rs. 43.7 million compared to Rs. 19.7 million in the same period last year.
HCAR paid Rs. 122.7 million in taxes in Q2 2023, compared to rs. 436 million last year.
Honda reported earnings per share (EPS) of Rs. 1.02 compared to an EPS of Rs. 4.61 in Q2 2022.
At the time of filing, the company’s scrip at the bourse was Rs. 122.2, up by Rs. 1.33 or 1.10 percent, with a turnover of 541,615 shares on Tuesday.
In a recent corporate briefing, HCAR stated that the banks are opening Letters of Credit (LCs) for the auto industry. It added that the sales will increase in the 2024 Market Year (MY 2024), provided that the government doesn’t restrict automotive imports again.
HCAR also shared its plans to launch hybrid electric vehicles (HEVs) in Pakistan in the future. The company did not comment on the exact timeline, the models, or if those models will be locally assembled.
In MY 2023, Honda sold 25,726 cars compared to 37,613 cars in MY 2022. After a rough year due to automotive import restrictions, the company seeks to improve these figures in MY 2024.
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