The Country’s prevailing economic meltdown continues to hurt local car industry plunging their sales, production and profit. Honda Atlas disclosed its financial performance for the first quarter ending on June 30, 2023.
According to a notification submitted to the Pakistan Stock Exchange, the company recorded a profit after tax of Rs. 144.9 million during Q2 2023, showing a significant decline of 78 percent Year-on-Year (YoY) compared to the corresponding period in the previous financial year, where it had achieved a profit after tax of Rs. 658.2 million.
The Slump
In the April-June 2023 quarter, Honda Atlas Cars Pakistan Ltd. (HCAR) experienced a significant decline in sales, which plummeted by a staggering 87.5 percent to Rs. 3.77 billion, in sharp contrast to the Rs. 30.24 billion achieved during the same period last year.
The cost of sales also saw a substantial reduction, decreasing by 86.2 percent Year-on-Year (YoY) to Rs. 3.91 billion, compared to Rs. 28.33 billion in Q2 2022. Consequently, the company faced gross losses amounting to Rs. 148.3 million during the quarter, in contrast to the gross profit of Rs. 1.91 billion reported in the corresponding period last year.
On a positive note, the other income of the company witnessed growth, rising by 71.4 percent YoY to Rs. 902.6 million, up from Rs. 526.6 million during the same period last year.
Furthermore, distribution and marketing costs showed a decline of 42.2 percent during the period under review, amounting to Rs. 140 million, compared to Rs. 242.1 million in the same period last year. Similarly, administrative expenses also decreased by 18.2 percent, totaling Rs. 271.9 million, compared to Rs. 332.6 million in Q2 2022.
In addition, Honda Atlas Cars Pakistan Ltd. (HCAR) experienced a significant increase in financing costs during the April-June 2023 quarter, which surged by 120.8 percent Year-on-Year (YoY) to Rs. 43.7 million, in contrast to Rs. 19.7 million recorded in the same period last year.
Moreover, the tax expenses for Q2 2023 amounted to Rs. 122.7 million, considerably lower than the tax paid in the same quarter last year, which was Rs. 436 million.
