Honda Atlas Cars Faces an 11% Profit Decline Over Nine Months

In the nine months concluding on December 31, 2023, Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) reported a notable 11.09% Year-over-Year (YoY) dip in profits. The company's after-tax earnings contracted to Rs963.54 million [EPS: Rs6.75], marking a decrease from Rs1.08 billion [EPS: Rs7.59] during the same period last year (SPLY).

The financial results indicate a substantial 58.55% YoY contraction in the company's top line, which now stands at Rs30.15 billion compared to Rs72.74 billion in SPLY.

Despite a 59.41% YoY reduction in the cost of sales, the gross profit suffered a 45.09% YoY decline, settling at Rs2.4 billion in the nine months ending December 31, 2023.

Nevertheless, the review period witnessed a positive development in other income, recording a growth of 27.37% YoY, reaching Rs2.09 billion, up from Rs1.64 billion in SPLY.

On the expenditure side, distribution and marketing costs decreased by 20.99% YoY, amounting to Rs534.79 million, while other expenses experienced a substantial 80.79% YoY decline, reaching Rs297 million during the review period.

Finance costs for the company surged by 60.29% YoY, reaching Rs607.11 million, attributed mainly to higher interest rates.

In terms of taxation, Honda Atlas Cars paid a reduced tax amounting to Rs1.04 billion, reflecting a 23.20% YoY decrease from the Rs1.35 billion paid during the corresponding period in the previous year.