Honda Atlas profit plunges 82pc in Oct-Dec

KARACHI: Honda Atlas Cars (Pakistan) Limited, the local assembler and distributor of Honda vehicles, reported an 82 percent drop in its quarterly profit, as sales slumped amid a slowdown in the auto sector.

The company posted a net profit of Rs143.25 million for the October-December period, down from Rs810.82 million a year earlier, according to its financial statements filed with the Pakistan Stock Exchange on Wednesday.

Earnings per share fell to Rs1 from Rs5.68 in the same quarter last year. The company attributed the decline in profit to a 46 percent fall in sales, which amounted to Rs12.43 billion, compared with Rs22.95 billion in the same period of the previous year. The auto sector in Pakistan has been facing a slump in demand due to high prices, rising interest rates, and a depreciating currency.

Honda Atlas Cars, a joint venture between Japan’s Honda Motor Co. and Pakistan’s Atlas Group, also saw its gross profit margin improve slightly to 8.3 percent from 7.8 percent, despite lower sales, as it reduced its cost of sales by 47 percent.

However, the company’s administrative expenses increased by 24 percent to Rs398.4 million, while its finance cost surged by 40 percent to Rs443.27 million, due to higher borrowing costs.

The company’s other income, which mainly comprises of interest income and exchange gains, also decreased by 11 percent to Rs288.19 million. The company’s profit before taxation was Rs227.38 million, down by 81 percent year-on-year.

For the nine months ended December 31, 2023, the company recorded a decline of 11.09 percent in its profits, with the after-tax profits falling to Rs963.54 million, compared to a profit of Rs1.08 billion in the same period last year.