Due to declining of revenues, Honda Atlas Cars profit dived fell 77% in the quarter ended June 2019.
According to a notice sent to the Pakistan Stock Exchange (PSX), Current year after-tax profit is Rs241.7 million in the quarter ended June 30, 2019 compared to Rs1.05 billion in the same period of previous year. The number of units sold during the quarter came in at 8,346 compared to 12,481 units in the same period of last year. Earnings per share dipped to Rs1.69 in the period under review from Rs7.36 in the previous year.
“The significant decline in earnings was mainly due to a massive 25% year-on-year reduction in revenue,” said Topline Securities’ analyst Hammad Akram. He said the revenues were down as volumetric sales of the company dropped 33% year-on-year. Sales were recorded at Rs17.9 billion in the quarter ended June 2019 compared to Rs23.9 billion in the previous year.
In recent quarters, Honda Atlas Cars has increased the prices of several variants from 8 to 23% due to a significant depreciation of the rupee, 5% of raw material tariffs and the imposition of federal excise duty, Akram added. Other revenues fell 67% to 174.9 million rupees due to low bank deposit income, as the company reduced the cash balance of its accounts after customers paid less in advance.
Meanwhile, operating expenses jumped to Rs739.8 million due to the exchange loss recorded by the company, the analyst said. Finance cost surged to Rs54.4 million from Rs4.4 million in the period under review.