Honda Atlas Cars’ profit plummets 77%

[Devil Soul]

Honda Atlas Cars’ profit plummets 77%
By Our Correspondent
Published: July 24, 2019
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Representational image. PHOTO: REUTERS

KARACHI: Earnings of Honda Atlas Cars took a massive hit in the quarter ended June 2019 as profits dived 77% on the back of declining revenues.

The company reported after-tax profit of Rs241.7 million in the quarter ended June 30, 2019 compared to Rs1.05 billion in the same period of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX).

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.

Honda Atlas’ profit dives 41% during Jan-Mar 2019

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.

Over the past quarters, Honda Atlas Cars had hiked prices of different variants in the range of 8-23% due to significant rupee depreciation, 5% advance customs duty on raw material and imposition of federal excise duty, Akram added. Other income plunged 67% to Rs174.9 million due to low income from bank deposits as the company reduced cash balance in its accounts after decline in advance payments from customers.

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.

According to Arif Habib Limited, the jump in finance cost in the quarter under review might be an indication of the company resorting to short-term borrowing in the face of declining advances due to low demand.

Published in The Express Tribune, July 24th, 2019.

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[war&peace]

Media cell patwari poodles active again. Picking up the negative news from their manipulated media and sharing here.

 

[Verve]

Good! They've milked long enough.

 

[313ghazi]

Maybe if Honda want to make more profits they should import less parts for their cars and set up manufacturing locally, rather than just assembly. Or Maybe they want to price them competitively.

 

[Syed1.]

That's good news

 

[Talha Asif]

Not a good news at all. It shows slow economy of country but its expected for some time. Let's hope its not gonna take decades

 

[American Pakistani]

Maybe if Honda want to make more profits they should import less parts for their cars and set up manufacturing locally, rather than just assembly. Or Maybe they want to price them competitively.

They have failed to set up their export market from Pakistani plants, and that have kept assembling instead of manufacturing. Shame on those Pakistanis who work in these companies and don't push for reforms that could help company and country.

 

[ps3linux]

Latest Financials, this is what I call post office journalism get the report and post it, link two unrelated facts and start propagating negativity.

Lets briefly analyse, the problem with these companies is heavy reliance on imports rather than local manufacturing, excessively paid rather bloated farts as executives ever get to meet them you'll feel nauseated like meeting up with NGO heavily powdered aunties.

Everyone knew the previous sales figures were mainly due to speculator/investors for collecting "own money" these companies knew and did nothing to control it, genuine buyer had to either cough up that "own money" or wait for a long time, serves these a**holes right.

Their own executives, their dealers all were minting money, don't want to share the ugliness of these white collars criminals more. Banks and bankers made billions through this.

With the excessive increase in prices of vehicles due to over reliance on imports and Govt control/regulation to control non-filer purchases it has come down to genuine buyers only. They have been fighting tooth and nail, bribing/lobbying with officials to get rid of filer requirement for purchase of vehicles.

Ask any of them what has the company done for capacity building in Pakistan, R&D, exports or education hell even if one asks them about CSR fund they will look at you like you are an alien.

 

[Shabi1]

View attachment 570661
Latest Financials

Honda's cash cow is the Honda City and they are selling a decade old model. Really need to launch its next generation as well as introduce a budget hatchback since city no longer priced in budget category.

To top it all they were supposed to source raw materials locally to prevent impact of exchange rate fluctuation, which they havnt. They are not suffering losses as they've revised rates at will but the volumes have taken a hit.

The Civic is now a 4 million car after taxes and registration, wont be generating the volumes.

Toyota will be launching a replacement for the XLi/Gli soon as the 1.3 engine is no longer in production from manufacturer. Rumored Toyota Vios will take it's place.
https://www.pakwheels.com/new-cars/toyota/vios/2019/

 

[Zhukov]

Releasing out dated models regularly, Increasing Vehicle prices every quarter Increase in more then 100% prices within 10 years. What else do you expect from these pathetic Assembling units?
I mean Atlas motors is assembling Honda Cars since 26 years now. and they cant even localize production of a single car. Manufacturers my foot a 5 rupee devaluation of Rupee Against Dollar marks a 5 10% Increase in the price of a single car.
go bankrupt yourself and let other players try their luck. Devaluing Rupee against Dollar was a good move. It have Exposed these Lazy Looters who were completely depending on imports.

 

[dilpakistani]

Slow down in production means tax collection decline as well... This is absolutely disastrous as these two vendors are huge tax source.

 

[Baburfromsarmarkand]

If they can't they can export to nations who have car shortages. USA. China. Japan afitca has. Booming car market in the more developed nations.

 

[user1]

There are several new car makers lined up and hopefully they will manufacture locally concentrating upon import substitution. They may give rise to something completely missing from the current assemblers: A healthy competition and better value for the consumer. Government should also make laws which protect and support the manufacturers bringing TOT.

 

[volatile]

celebrating down fall of what ever LSM this country has ,shows the mindset of Govt and its supporters . For LSM to be truly localized they must be provided with competitive environment plus incentives like electricity (Being earlier no electricity now expensive electricity) and table chair political situation i do wonder till when these groups will plan to move out of Pakistan ,every 3rd card in Pakistan and almost every 2nd car is being financed all across the world ,with 12.5 percent Interest no body will dare to do business ,but hey what the hell we have IK and he has done a great jalsa in US .

 

[Pakhtoon yum]

Good! They've milked long enough.

Agreed!