Honda Atlas Cars Pakistan Ltd. (HCAR) has released its financial results for the first quarter of 2023, which ended on June 30, 2023.
According to a notification to the Pakistan Stock Exchange, the company declared a profit after tax of Rs. 144.9 million in Q2 2023, a 78 percent decrease from the same time the previous fiscal year, when it claimed a profit after tax of Rs. 658.2 million.
Waqas Ghani, Deputy Head of Research at JS Global
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.
Sales fell 87.5 percent to Rs. 3.77 billion in April-June 2023, compared to Rs. 30.24 billion in the same period the previous year.
Read more : The government intends to double the tax on imported automobiles.
The cost of sales was recorded at Rs. 3.91 billion, an 86.2 percent decrease year on year from Rs. 28.33 billion in Q2 2022. This increased the company’s gross losses to Rs. 148.3 million, compared to Rs. 1.91 billion in gross profit reported in the same time last year.
Meanwhile, the company’s other income climbed by 71.4 percent year on year during the quarter to Rs. 902.6 million, up from Rs. 526.6 million in the same period previous year.
In the period under review, distribution and marketing expenditures fell by 42.2 percent to Rs. 140 million.
In addition, the company’s borrowing costs increased 120.8 percent year on year to Rs. 43.7 million, up from Rs. 19.7 million in the same period previous year.
In the second quarter of 2023, HCAR paid Rs. 122.7 million in taxes, compared to Rs. 436 million the previous year.
Honda reported profits per share (EPS) of Rs. 1.02 in Q2 2022, compared to Rs. 4.61 in Q2 2022.
The company’s scrip at the time of reporting was Rs. 122.2, up Rs. 1.33 or 1.10 percent, with a turnover of 541,615 shares on Tuesday.
HCAR revealed in a recent corporate briefing that banks are opening Letters of Credit (LCs) for the car industry. It further stated that sales will rise in the 2024 Market Year (MY 2024).
HCAR also revealed its future ambitions to introduce hybrid electric cars (HEVs) in Pakistan. The business did not comment on the specific date, the models, or whether those models will be built locally.
Honda sold 25,726 vehicles in MY 2023, compared to 37,613 vehicles in MY 2022. Following a difficult year due to auto import limitations, the business hopes to improve these results in MY 2024.
