July 26, 2022 (MLN): While going through stiff challenges in the local market as well as in the international market due to the global recession, the profitability of Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) plunged by 29% YoY for the quarter ended on June 30, 2022, as the profit after tax stood at around Rs66 million (EPS: Rs4.61) compared to Rs93mn (EPS: Rs6.50) in the same period last year.
The decline in profits is largely attributed to the ongoing economic mayhem in Pakistan particularly rising PKR dollar parity, declining foreign exchange reserves, increase in input prices such as steel, imposition of higher taxes, and interest rates.
The top-line of the company grew by almost 40%% YoY to Rs30.25 billion. However, the surge in cost of sales has offset this increase in revenue which led the gross margin to witness a drop of 99bps compared to 7.33% in the same period last year.
It is pertinent to mention that HCAR sold 9,442 units in 1QMY23 against 10,462 units sold during the SPLY.
The distribution & marketing and administrative expenses have soared by 82.76% YoY and 44% YoY to Rs242.10mn and Rs332.6mn, respectively.
In the wake of an increase in interest rates, the finance cost of the company jumped by a whopping 72.14% to Rs19.77mn.
However, the other income of the company has supported the bottom line from a major hit as the other income of the company expanded by 57% to clock in at Rs526.66mn in the review period. The increase in other income was accredited to higher advances from customers, and high delivery time for HCAR vehicles.
To note, the company did not announce any amount in terms of cash payout/dividend for this quarter.
At the time of writing this, the stock of HCAR is trading at a price of Rs157/share, down by Rs1.30 or 0.80% DoD.
|
Profit and Loss statement for the first quarter ended June 30, 2022 ('000 Rupees) |
|||
|---|---|---|---|
|
Jun-22 |
Jun-21 |
% Change |
|
|
Sales |
30,245,857 |
21,764,731 |
38.97% |
|
Cost of sales |
(28,330,433) |
(20,169,943) |
40.46% |
|
Gross profit |
1,915,424 |
1,594,788 |
20.11% |
|
Distribution & marketing cost |
(242,101) |
(132,469) |
82.76% |
|
Administratiive expenses |
(332,608) |
(230,996) |
43.99% |
|
Other income |
526,665 |
335,269 |
57.09% |
|
Other expenses |
(753,367) |
(191,566) |
293.27% |
|
(801,411) |
(219,762) |
264.67% |
|
|
Profit/ (Loss) from operations |
1,114,013 |
1,375,026 |
-18.98% |
|
Finance cost |
(19,774) |
(11,487) |
72.14% |
|
Profit/ (Loss) before taxation |
1,094,239 |
1,363,539 |
-19.75% |
|
Taxation |
(436,037) |
(435,315) |
0.17% |
|
Profit/ (Loss) after taxation |
658,202 |
928,224 |
-29.09% |
|
Earnings/ (Loss) per share – basic and diluted |
4.61 |
6.50 |
-29.08% |
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