November 16, 2022 (MLN): While going through stiff challenges in the local market as well as in the international market due to the global recession, the profitability of Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) plunged by 85.39% YoY for the half year ended on Sep 30, 2022, as the profit after tax stood at around Rs273 million (EPS: Rs1.91) compared to Rs1.87 billion (EPS: Rs13.08) in the same period last year.
The decline in profits is largely attributed to the ongoing economic mayhem in Pakistan particularly rising PKR dollar parity, declining foreign exchange reserves, imposition of higher taxes, and interest rates.
The top line of the company grew by 4.30% YoY to Rs49.79bn. However, the surge in the cost of sales has offset this increase in revenue which led the gross margin to witness a drop of 23.49% YoY.
The distribution & marketing and administrative expenses have soared by 32.68% YoY and 31.28% YoY to Rs458mn and Rs661mn, respectively.
In the wake of an increase in interest rates, the finance cost of the company jumped by a whopping 54.37% YoY to Rs61.04mn.
However, the other income of the company expanded by 54.36% YoY to clock in at Rs1.31bn in the review period.
To note, the company did not announce any amount in terms of cash payout/dividend for this quarter.
At the time of writing this, the stock of HCAR is trading at a price of Rs164.25/share, down by Rs2.25 or 1.35% DoD.
