Honda Atlas posts 82% increase in profits

After-tax profit rises 82% to Rs810 million in Q3FY23 from Rs445 million last year

KARACHI:

Honda Atlas Cars Pakistan Limited (HCAR) posted a significant profit in the third quarter ended on December 31, 2022, the company announced on Thursday.

In its financial result for the third quarter, the HCAR reported that its after-tax profits increased 82% to reach Rs810.825 million from Rs445.945 million recorded in the same period last year.

The auto giant reported that its earnings per share (EPS) stood at Rs5.68 in the quarter under review, up by 82%, against Rs3.12 in the same period last year.

According to a Topline Securities report, “The earnings were higher than the industry’s expectations due to higher-than-expected gross margins.”

The gross margins of the company also improved as a result of newer effective prices and higher volumes.

Other income of HCAR, however, dropped by Rs321million.

Other incomes of the auto sector were affected due to a drop in booked orders and higher cash requirements for Letters of Credit (LCs).

Pakistan’s automobile sector’s volumetric sales, excluding two and three wheelers, for the period September 2022 to December 2022 clocked-in at 51,987 units, down 37% year-on-year, but up 19% quarter-on-quarter, according to Taurus Securities.

Overall auto sector sales experienced a major hit during the quarter on account of the high price of automobiles; inflationary environment in the country along with high interest rates and, non-production days of assemblers due to insufficient inventory of completely knocked down (CKD) kits.

Following the market trend, HCAR increased its vehicles prices recently in view of the significant devaluation of the rupee against the dollar. Similarly, input costs (freight costs), metal prices (steel sheets, aluminium and copper) and other raw materials used in the manufacturing of cars remained high in the quarter under review.