Honda Atlas Cars Limited (HCAR) announced its 3QMY24 results today where the company posted PAT of PkR143mn (EPS: PkR1.0) vs. PkR143mn (EPS: PkR4.7) in the previous quarter. The results fell below expectations, primarily due to increased financial charges.

·         Company’s topline amounted to PkR12.4bn, marking a decline of 11% on a quarterly basis and 46% on a yearly basis. This notable reduction is attributed to a decrease in sales volumes, with the company selling only 2,375units compared to 2,510/5,477units in 2QMY24/SPLY, respectively.

·         Gross margins contracted to 8.3%, down from 10.9% in the previous quarter, primarily due to a decline in ex-factory prices at the end of October.

·         Other income experienced a significant 68%QoQ decline to PkR288mn, largely due to a decrease in short-term investments to PkR3.8bn in Sept’23 from PkR10.1bn in Jun’23.

·         A major deviation from expectations was observed in higher financial charges, amounting to PkR443mn (compared to our expectations of PkR26mn). This increase may possibly be due to a rise in borrowings or higher discounting of long-term trade debts.

·         Overall, earnings for 9MMY24 accumulated to PkR6.7/sh compared to PkR7.6/sh in the same period last year, down 11%YoY.

Courtesy – AKD Research