HCAR's profit plunges 62% amid rising costs

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%.

Amount in thousand except for EPS

Copyright Mettis Link News