Amid massive decline in sales, the profit-after-tax (PAT) of Honda Atlas Cars (Pakistan) Limited (HCAR) plunged over 82%, clocking in at a mere Rs143.25 million in the third quarter (October-December) of its fiscal year 2023-24, as compared to PAT of Rs810.82 million recorded in the same period of the previous year.
As per HCAR’s financial statements made available at the Pakistan Stock Exchange (PSX) on Wednesday, the automobile company’s earnings per share (EPS) stood at Rs1 in 3QFY24, compared to an EPS of Rs5.68 last year.
The plunge in profit can be attributed to a massive decline in sales.
During 3QFY24, HCAR’s sales declined to Rs12.43 billion, as compared to Rs22.95 billion in SPLY, a plunge of 46%.
Honda Atlas Cars’ profit-after-tax clocks in at Rs675m in July-Sept
Subsequently, the company reported a gross profit of Rs1.03 billion in 3QFY24, a drop of nearly 43%, as compared to a gross profit of Rs1.79 billion in SPLY. However, despite lower gross profits, HCAR’s gross margins rose to 8.3% in 3QFY24, as compared to 7.8% in SPLY.
Moreover, the company witnessed a jump in its administrative expenses which stood at Rs398.4 million in 3QFY24, up by 24%, as compared to Rs321.6 million in SPLY.
HCAR’s other income also registered a decline of 11%, amounting to Rs288.19 million in 3QFY24, in comparison to Rs324.52 million in 3QFY23.
The automaker also saw its finance cost jump nearly 40%, standing at Rs443.27 million in 3QFY24, as compared to Rs317.73 million in SPLY. The increase in finance cost can be attributed to an increase in interest rates during the period.
The company managed to post Profit before Taxation (PBT) of Rs227.38 million in 3QFY24, down by 81% YoY.
Incorporated in Pakistan as a public limited company in 1992, HCAR commenced its commercial operations in 1994. The company was formed as a result of a joint venture between Honda Motor Co., Ltd., Japan and Atlas Group of Companies, Pakistan.
The company is engaged in the assembly and progressive manufacturing as well as sale of Honda vehicles and spare parts.