KARACHI: Leading auto giant Honda Atlas Cars (Pakistan) Limited has reported a 90 per cent decline in its full-year net profit, citing an increase in expenses.
The company, in its stock filing, has reported a net profit of Rs260.141 million for the year that ended March 31, down from Rs2.509 billion the previous year. The company skipped any payout for the said period. Earnings per share came in at Rs1.82/share, compared with Rs17.58/share last year.
The company’s revenue for the year dropped to Rs95.087bn, compared with Rs108.047bn a year earlier. Its cost of sales remained at 87.926 billion from Rs102.515 billion during the same period last year.
Other income for the period rose to Rs2.321bn, compared with Rs2.004bn the previous year. Other expenses rose to Rs4.929bn from Rs984.045m, which affected the profit margins.
According to Brokerage Arif Habib Ltd, the significant decline in profit was attributed to lower volumetric sales and higher finance costs, which were recorded up by 6.5x on a year-on-year basis.
Among other companies, Honda also announced plant closure from March 9 this year, but on May 16, a months-long production break, Honda Atlas Cars announced to resume production activities after an improvement was witnessed in the accessibility of trade finance facilities for the supply chain.
The cash-strapped coalition government resorted to some stringent measures, including restrictions on letters of credit (LCs) for the import of CKD (completely knocked down) and raw materials imported by the auto industry.
Honda said: “With the consistent efforts of the company and slight improvement in accessibility of trade finance facilities for the supply chain, the company is now preparing to resume its production in the weeks ahead, with the hope to increase the same gradually”.
Honda recorded a decline of 75pc month-on-month to 207 units in April, led by a decline in sales of City and Civic by 74pc.
