Honda Pakistan’s Profits Plunge By Over 82% Amid Car Sales Slump

Honda Atlas Cars Limited (HCAR) posted a profit after tax of Rs. 143.2 million in the third quarter ended December 31, 2023, down 82.3 percent year-on-year (YoY) from a profit of Rs. 810.8 million in the same period last year (SPLY), according to the notification filed by the car maker to the Pakistan Stock Exchange (PSX). The decline in earnings is attributable to the reduction in topline amid a 57 percent YoY fall in volumetric sales, according to Arif Habib Limited. Honda Atlas Cars did not announce any dividend payouts for its shareholders for the period. For the 9 months April-December (9MMY24), the company posted earnings of Rs. 6.75 per share as opposed to earnings of Rs. 7.6 per share in 9MMY24. The sales of the company during the quarter fell by 46 percent to Rs. 12.4 billion from Rs. 22.9 billion recorded in the corresponding period last year. In 9MMY24, the topline of the company arrived at Rs. 30.1 billion, declining by 59 percent YoY. This decline is primarily driven by lower volumetric sales and the impact of import restrictions imposed by the SBP. Additionally, HCAR experienced 17 non-production days during 3QMY24. The company reported a gross profit of Rs. 1 billion in Q3, down by 43 percent as compared to Rs. 1.79 billion that was posted in the same period last year. The gross margin clocked in at 8.25 percent in Q3 taking the 9-month ratio to 8 percent. In 3QMY24, distribution and marketing costs decreased to Rs. 182.6 million as compared to Rs. 218.5 million. Meanwhile, the other income of the company fell by 11.2 percent to Rs. 288 million from Rs. 321 million during Q3. on account of the reduction in cash and cash balances. Meanwhile, it surged by 27 percent YoY to Rs. 2 billion during 9MMY24. The finance cost of the company skyrocketed by 40 percent from Rs. 318 million to Rs. 443 million during 3QMY24. In 9MMY24, it jumped 60 percent YoY to Rs. 607 million. The company reported earnings per share (EPS) of Rs. 1 during 3QMY24 compared to an EPS of Rs. 5.68 last year. At the time of filing, HCAR’s scrip at the bourse was Rs. 249.9, down 0.25 percent or Rs. 0.63 with a turnover of 762,864 shares on Wednesday.