Honda Atlas Cars (Pakistan) Limited (HCAR) experienced a significant decrease in profit after tax (PAT) in the first quarter (April-June) of its fiscal year 2023-24. The company’s after-tax profit dropped 78% compared to the same period last year, amounting to Rs144.96 million. This resulted in earnings per share (EPS) of only Rs1.02 in the first quarter, down from Rs4.61 in the previous year.
The decline in profit can be attributed to a sharp decrease in sales, which plummeted by 88% to Rs3.77 billion in the first quarter of the current fiscal year. Additionally, the company had a gross loss of Rs148.38 million due to the cost of goods sold exceeding sales. However, HCAR saw an improvement in other income, which reached Rs902.686 million in the first quarter.
Despite these challenges, HCAR managed to achieve a profit before taxation (PBT) of Rs267.695 million, representing a year-on-year decline of 76%. HCAR is a joint venture between Honda Motor Co., Ltd., Japan, and Atlas Group of Companies, Pakistan. The company is involved in the assembly, manufacturing, and sale of Honda vehicles and spare parts.
Pakistan’s automobile industry experienced a significant decline in car sales in fiscal year 2022-23, with a 56% drop to only 126,879 units. This decline was attributed to factors such as the unavailability of completely knocked down kits (CKDs), high car prices, increased auto financing, and the low purchasing power of buyers.
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