Atlas Honda earnings dip 51% on lower margins

Bike-maker earns Rs572 million in Oct-Dec quarter


PHOTO: ATLAS HONDA/FILE

KARACHI: Owing to a higher production cost, Atlas Honda has reported a 51% drop in its profit for the quarter ended December 2018, according to a bourse filing on Wednesday.

The two-wheeler manufacturer posted a Rs572-million profit for the quarter, down 51%, compared to earnings of Rs1.2 billion in the same quarter of previous year.

Its earnings per share (EPS) fell to Rs5.54 in the Oct-Dec 2018 quarter against Rs11.32 in the same period of previous year. “This was due to a 500-basis-point decline in gross profit margins, 3% year-on-year rise in sales and marketing expenses and 6% rise in finance cost,” said Topline Securities in its research report.

For nine months (Apr-Dec 2018), Atlas Honda announced a profit of Rs2.5 billion, down 26% from Rs3.4 billion in the corresponding period of previous year.

The company’s stock price dipped Rs17.51 to Rs362.49 with trading in 7,800 shares on Wednesday. For the day, the Pakistan Stock Exchange (PSX) closed at 40,607.12 points with a decrease of 17.27 points in the KSE-100 index.

However, in December, the two-wheeler manufacturer remained unaffected by the ongoing economic slowdown as sales of motorcycles increased 8.2% to 60,538 units compared to 56,512 units in December 2017, according to Atlas Honda’s quarterly report. With clarity on external funding arrangements, falling international crude oil prices were expected to ease the pressure on Pakistan’s foreign exchange reserves and inflationary pressures were also likely to subside, said the Topline report.

“After the economy regains its balance, it is expected that the country will resume its growth momentum, which will boost the demand for the two-wheelers also.”

Published in The Express Tribune, January 31st, 2019.

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