HCAR: Earning momentum remains robust

January 25, 2022 (MLN): Honda Atlas Cars Pakistan (HCAR) has posted a 2.6x YoY increase in net profits to Rs2.3 billion during 9MCY21 compared to the profits of Rs897.6 million in the corresponding period last year.

This is reflected in the company’s earnings per share which went up to Rs16.2 from Rs6.29 last year.

The increase in profitability was driven by a 73% YoY increase in sales volume where the key revenue driver remains the new model euphoria of Honda City.

To recall, at the beginning of 3QCY21, HCAR launched the 6th generation City in Pakistan, which received a tremendous response from car buyers across Pakistan.

The jump in car sales was due to improved economic activity along with lower interest rates favouring the automobile sector.

Despite the increase in car prices, the gross margins of the company dipped to 5% from 6% last year, mainly attributable to the depreciation of PKR against USD.

The other income of the company inflated by 3.4x YoY to Rs1.38bn on account increase in cash and short-term investments and an increase in the policy rate by 275bps.

On the cost side, the distribution cost went up by 25% YoY whereas administrative expenses jumped by 37% to stand at Rs750.4mn.

Moreover, the company witnessed a sharp 60% YoY decline in its finance cost to Rs55.6mn as compared to Rs140.2mn during the same period last year.

At the time of writing this report, HCAR’s scrip at the bourse was trading at Rs209.72, down by Rs5.02 or 2.34% DoD on Tuesday.

 

Profit and Loss statement for the nine months ended December 31, 2021 ('000 Rupees)

 

Dec-21

Dec-20

% Change

Sales

                       77,279,809

                       44,588,100

73.32%

Cost of sales

                     (73,095,257)

                     (41,993,150)

74.06%

Gross profit

                         4,184,552

                         2,594,950

61.26%

Distribution & marketing cost

                           (526,678)

                           (421,421)

24.98%

Administrative expenses

                           (750,464)

                           (546,184)

37.40%

Other income

                         1,381,996

                             401,284

244.39%

Other expenses

                           (781,672)

                           (141,010)

454.34%

 

                           (676,818)

                           (707,331)

-4.31%

Profit/ (Loss) from operations

                         3,507,734

                         1,887,619

85.83%

Finance cost

                             (55,681)

                           (140,253)

-60.30%

Profit/ (Loss) before taxation

                         3,452,053

                         1,747,366

97.56%

Taxation

                       (1,138,679)

                           (849,712)

34.01%

Profit/ (Loss) after taxation

                         2,313,374

                        897,654

157.71%

Earnings/ (Loss) per share – basic and diluted

                                  16.20

6.29

157.55%

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Posted on: 2022-01-25T16:15:48+05:00

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