HCAR's profit plunges 62% amid rising costs

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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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