Atlas Honda Limited (AHL), Pakistan’s largest motorcycle manufacturer with a market share of over 50%, has posted a profit after tax of Rs488 million for the quarter ended June 30 2013, up 40% against Rs350 million in the corresponding period last year.
Company sales also improved by 7% to Rs10.75 billion for the quarter ended June 30 2013 from Rs10.06 billion in the corresponding period previous year. Earnings per share (EPS) for AHL improved to Rs4.73 per share in the quarter ended June 30 2013, up from Rs3.39 per share in the corresponding period last year.
On a yearly basis, profit after tax for the 12 month period ended March 31 2013 was Rs1.60 billion, up 33% against Rs1.20 billion in the previous year, showing an increase in growth rates.
AHL is a joint venture between the Atlas Group – a local financial and industrial conglomerate and Honda Motor Company Ltd Japan. It is by far the biggest motorcycles maker in the country.
Honda operates through two joint ventures in the Pakistani automobile sector, both with the Atlas Group. It owns a 51% stake in Honda Atlas Cars (a sedan manufacturer) and a 35% stake in Atlas Honda (the motorcycle manufacturer).
AHL sold over 630,000 units in the 12 month period ended March 2013, up 5% against a little over 600,000 units in the previous year, resulting in total revenue from sales in 2013 of Rs42.32 billion, up 11% from Rs38.01 billion in 2012. The next step for the company is touching the one million units a year barrier.
The company is trying to reduce cost by completely switching to local parts used in its motorcycles, up from 92% currently.
AHL exports motorcycles and spare parts to Sri Lanka, Bangladesh and Afghanistan. The company’s motorcycle exports declined to Rs478 million in the 12 month period ended March 31 2013, down 57% from Rs1.01 billion in the corresponding period last year, according to the company’s annual report of 2013.
Atlas Honda has its main plant is based Karachi, and another plant in Sheikhupura city, Punjab. Industry officials say that motorcycle industry has been showing steady growth over the last decade. Total annual production of motorcycles has been stable around 1.6 million units for the last three years and it has the potential to grow sharply because of strong demand in the local market.
Published in The Express Tribune, August 1st, 2013.
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