Honda Atlas starts bearing the brunt of the country’s deteriorating economic graph. The company has revealed the figure chart for the first quarter of the year, declaring a sharp down of 29% in profits.
The automaker reported a profit of Rs. 658.2 million as compared to Rs. 928.2 million earned in the corresponding period of last year. The profit figures are still better than what was expected because the steep rise in dollar rate and rupee depreciation left no hope for the car companies.
Sales/Figures
The sales, during the first quarter, were raised to Rs. 30.24 billion as compared to Rs. 21.76 billion in the same period of last year. Means, that the company observed a profit of 39%.
Similarly, back-to-back price hikes and thumping figures of sales up the revenues by 24% (year-on-year growth).
The company also witnessed a 20.13% growth in gross profit, increasing to Rs. 1.91 billion as compared to Rs. 1.59 billion in the corresponding period of last year. The company’s other income also increased by 57% in the face of new car bookings. This means the company earned Rs. 526 million against Rs. 335.26 million in the same period last year.
An increase in car prices and high sales volume increase the company’s sales by 39%. But despite this, the company’s profits have seen a decline.
So, here is a “twist” to translate where the fortunes reversed.
A Twist
Despite all these smiling figures of gross profit, revenues, sales and other income, the super tax imposed by the incumbent government and a down in gross margins make the company observe a decline of 29%.
Moreover, the marketing and distribution expenses were up by 83.4%, increasing to Rs. 242 million as compared to Rs. 132 million. Other company expenses also escalated to Rs. 753 million from Rs. 191 million, up by 295 percent – a massive jump.
What do you think about the profit decline of Honda Atlas? Share your thoughts in the comments section.
