Honda Atlas Cars (HCAR) has experienced a major setback with an 82% decline in its profit-after-tax (PAT), dropping to just Rs143.25 million in the third quarter of its fiscal year 2023-24. This is a sharp contrast to the Rs810.82 million PAT recorded in the same period the previous year, highlighting the severity of the downturn.
The primary reason for this financial decline is a huge drop in sales, as HCAR’s sales fell by 46%, from Rs22.95 billion in the same quarter last year to Rs12.43 billion in the current fiscal year.
As a result, the company reported a gross profit of Rs1.03 billion in 3QFY24, which reflects a nearly 43% decrease from Rs1.79 billion in the same quarter of the previous year. Surprisingly, despite the drop in gross profits, HCAR’s gross margins actually rose to 8.3%, up from 7.8% in the same quarter last year.
Administrative expenses saw a significant increase, rising by 24% to Rs398.4 million in 3QFY24 compared to Rs321.6 million in the corresponding period last year.
Other factors contributing to HCAR’s financial troubles include an 11% decline in other income, standing at Rs288.19 million in 3QFY24, and a substantial 40% increase in finance costs, reaching Rs443.27 million. The spike in finance costs is attributed to the prevailing increase in interest rates during the period.
Last Month Sales for Honda Atlas
Hyundai Nishat sales observed a downtrend of 11%, selling 901 units last month compared to 1,015 units in November 2023. Honda Atlas sold 787 units of City and Civic and 114 units of BR-V.
The car sector in Pakistan is currently facing challenges, and the lack of economic stability will continue to cast a shadow over Pakistan’s car industry.
According to the latest report from the Pakistan Automotive Manufacturers Association (PAMA), there was a 10% month-on-month (MoM) decline in car sales last month, with 5,816 vehicles sold compared to the 6,475 units sold in November 2023.
Comparing year-to-year (YoY) data, there is a significant 66% drop, as car manufacturers managed to sell only 17,012 cars during the corresponding period last year.
