Earning Review: HCAR disappoints despite beating market expectation

MG News | November 14, 2019 at 01:00 PM GMT+05:00

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November 14, 2019 (MLN): Honda Atlas Cars (Pakistan) Limited (HCAR) has reported net earnings of Rs. 751.4 million (EPS: Rs. 5.26) for the half year ended September 30, 2019, i.e. around 64% lower than the earnings reported in same period of last year.

A lot of factors played a role in the bleak performance of the company, including drop in volumetric sale which resulted in a 40.5% decline in revenue, decline in non-core income and colossal rise in finance cost.

Nonetheless, fall in income tax expense by approximately 70% proved to be a source of respite for the company.

While the performance of the company was largely dismal, it was still better than the market consensus wherein the expectation was that the company would post net losses for the said period.

Profit and Loss statement for the half year ended September 30, 2019 ('000 Rupees)
	Sep-19	Sep-18	% Change
Sales	29,526,146	49,671,603	-40.56%
Cost of sales	(26,960,808)	(45,879,834)	-41.24%
Gross profit	2,565,338	3,791,769	-32.34%
Distribution & marketing cost	(357,112)	(356,337)	0.22%
Administrative expenses	(376,087)	(381,832)	-1.50%
Other operating income	200,141	809,429	-75.27%
Other operating expenses	(675,097)	(610,663)	10.55%
Profit from operations	1,357,183	3,252,366	-58.27%
Finance cost	(254,438)	(6,367)	3896.20%
Profit before taxation	1,102,745	3,245,999	-66.03%
Taxation	(351,333)	(1,165,211)	-69.85%
Profit after taxation	751,412	2,080,788	-63.89%
Earnings per share - basic and diluted	5.26	14.57	-63.90%

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