Hinopak delivers profits amid era of downturn

Posts increase of 780 units compared to 663 units in previous year

KARACHI:

Despite a downturn in sales reported by every company in Pakistan’s auto sector, Hinopak has managed to sell more trucks and buses in the nine months of this year compared to the same period last year.

According to the company report to the Pakistan Stock Exchange (PSX) for the nine months ended December 31, 2022, the sale of Hinopak’s trucks and buses increased to 780 units from 663 units in the corresponding period of last year.

The total sale of commercial vehicles of all makes in the country during the period under review was 3,549 units – 11% lower than in the corresponding period of last year.

Sabir Shaikh, an expert in the automotive sector, noted that there is a significant demand for trucks and buses in Pakistan. “The country requires a large number of these vehicles, not only for general use but also for government projects that necessitate hundreds of trucks. In recent years, the government imposed a ban on imported vehicles, which has created an opportunity for domestic manufacturers like Hinopak,” he said.

“As a result, Hinopak has reported increased sales of trucks and buses, a trend that is expected to continue as the demand for these vehicles remains high,” added Shaikh.

The sales revenue for the nine months increased to Rs9.80 billion from Rs8.81 billion, the company earned gross profits of Rs815 million as compared to gross profit of Rs984 million in the corresponding period of last year.

However, the finance cost of the company stood at Rs158 million, including a net exchange loss of Rs143 million, in comparison with the finance cost of Rs119 million, including net exchange losses of Rs97 million in the corresponding period of the last year. The increase is mainly attributable to the devaluation of the rupee against the US dollar.

Despite the challenging business conditions resulting from high political unrest and economic crisis, the director of the company in the report mentioned that the management of Hinopak is committed to navigating this phase with grit and determination along with the support of stakeholders and business partners.

The company’s profit after tax stood at Rs10 million compared to profit after tax of Rs342 million in the corresponding period from last year, leading to earnings per share of Rs0.41. Last year, it stood at Rs13.77 earnings per share.

Hinopak’s ability to buck the trend and sell more trucks and buses amid a downturn in sales reported by the rest of the auto sector in Pakistan highlights the significance of the domestic market and the demand for commercial vehicles in the country. As the government continues to impose bans on imported vehicles, the opportunities for domestic manufacturers like Hinopak are expected to increase.

Published in The Express Tribune, March 30^th, 2023.

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