HCAR profitability nosedives by 90% YoY in MY23

May 26, 2023 (MLN): Honda Atlas Cars Pakistan Limited (PSX: HCAR) experienced a massive decline of 89.64% YoY in profitability, clocking in its profit after tax at Rs260.14 million [EPS: Rs1.82] for MY23, as compared to Rs2.5 billion [EPS: Rs17.58] in the same period last year (SPLY).

Going by the financial statement, no final cash dividend was paid in the year ended March 31, 2023, as compared to Rs7.0 per share (i.e. 70%) declared last year.

During the period under review, the company witnessed a fall in topline by 12% YoY to Rs95.08bn as compared to Rs108.04bn in SPLY.

On the cost front, the distribution cost fell by 21% YoY to stand at Rs902.37m, while administrative expenses surged by 22.44% YoY and stood at Rs1.32bn in MY23.

The company’s finance cost soared significantly by 6.49x YoY to Rs346.14m in MY23 due to higher interest rates, which hurt its profitability.

During the review period, other expenses also inflated significantly by 5x YoY and stood at Rs4.92bn as compared to just Rs984.04m in SPLY, while other income saw a meager rise as compared to expenses, up by 15.8% YoY to Rs2.32bn.

On the taxation front, the company paid a slightly lesser tax expense of Rs1.72bn, down by 2.44% YoY as compared to paying a tax of Rs1.76bn in SPLY.

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