KARACHI: Atlas Honda Limited – the largest motorcycle maker in the country – has posted a net profit of Rs1 billion in the quarter ended on December 31, up 32% compared to Rs755 million in the same period last year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) increased to Rs9.68 compared with Rs7.30 in the period under review.
Cumulatively, the company reported a net profit of Rs2.71 billion in the first nine months (Apr-Dec) of fiscal year 2016-17, up 29% compared with Rs2.1 billion in the same period of last year.
EPS in first nine months of 2016-17 jumped to Rs26.22 compared with Rs20.31 in the same period of last year.
The company share price closed at Rs597.35, down 5%. The KSE-100 index saw a massive correction of 991 points and closed at 48,972 or 1.98%.
Unlike passenger cars, the motorcycle industry has been showing steady growth over the last few years. Annual production of motorcycles has remained stable and has now crossed 2 million because of continuous demand in the domestic market.
The company is currently expanding its operations and planning to expand its product portfolio with an investment of $150 million. The phase-wise investment will span five years.
It is currently offering six locally-manufactured two-wheeler products of up to 125cc category and two imported motorcycles for the niche market. Due to increasing popularity of higher-engine category motorcycles, the company is planning to introduce more models with greater engine capacity.
To achieve the goal, the company has finished the first phase of its expansion project at the Sheikhupura plant, Punjab that will see its capacity increase to 1.2 million units per annum.
The company is witnessing an average demand boost of around 30% for the past few years. Atlas Honda, which rolled-out its first bike in 1964 from its Karachi plant, sold record 807,669 units in fiscal year 2015-16, according to annual report of the company.
Currently, 142 vendors are associated with the company that helps it towards localisation percentage of up to 94% for its CD-70 model and 90% in the 125cc category.
Published in The Express Tribune, January 31st, 2017.