HCAR's profit plunges 62% amid rising costs

MG News | November 22, 2024 at 03:18 PM GMT+05:00

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November 22, 2024 (MLN): Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) revealed its profitability, wherein the profit after tax clocked in at Rs257.74 million [EPS: Rs1.8] compared to a profit of Rs675.34m [EPS: Rs4.73] in the same period last year (SPLY).

The company experienced this profit drop despite its topline surging 18.92% to Rs16.6bn.

Part of this decline was due to the cost of sales outpacing sales growth, which resulted in a 20.0% decrease in gross profit, bringing it to Rs1.22bn in Q3 CY24.

Accordingly, the gross margins worsened to 7.4% as compared to 10.9% in SPLY.

HCAR suffered a further hit as its other income fell by 90.5% to stand at Rs84.85m as compared to Rs896.57m in SPLY.

On the expense side, the company's administration expenses rose 14.5% YoY to Rs437.92m.

On the other hand, distribution and selling expenses fell 14.6% YoY to Rs181.17m, and other operating expenses dropped 67.1% YoY to Rs66.97m.

The company’s finance cost grew by 60.9% and stood at Rs193.31m as compared to Rs120.17m in SPLY, mainly due to higher interest rates.

On the tax front, the company paid a lower tax worth Rs168.71m against the Rs829.64m paid in the corresponding period of last year, depicting a fall of 79.7%.

Unconsolidated (un-audited) Financial Results for quarter ended September 30, 2024 (Rupees in '000)
	Sep 24	Sep 23	% Change
Sales	16,596,927	13,956,298	18.92%
Cost of sales	(15,375,959)	(12,429,502)	23.71%
Gross Profit/ (loss)	1,220,968	1,526,796	-20.03%
Administration expenses	(437,919)	(382,600)	14.46%
Distribution and selling expenses	(181,170)	(212,117)	-14.59%
Other Income	84,845	896,574	-90.54%
Other Operating Expenses	(66,965)	(203,506)	-67.09%
Financial (charges) / income	(193,314)	(120,169)	60.87%
Profit/ (loss) before taxation	426,445	1,504,978	-71.66%
Final tax / levies	(168,706)	(829,642)	-79.67%
Net profit/ (loss) for the period	257,739	675,336	-61.84%
Basic earnings/ (loss) per share	1.80	4.73	-

Amount in thousand except for EPS

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