Honda Atlas Cars Pakistan Ltd. has decided to prolong the shutdown of its production plant, due to import restrictions.
The current economic situation in Pakistan has compelled the government to adopt strict measures, such as limiting the opening of LCs for importing CKD kits and raw materials, and stopping foreign payments. As a result, Honda Atlas Cars Pakistan Ltd.’s supply chain has been significantly impacted by these measures.
As a consequence, the company finds itself unable to sustain its production operations and has decided to continue the shutdown of its plant from April 01, 2023 to April 15, 2023. Previously, the company had shut down its plant from March 09, 2023 to March 31, 2023.
The unconsolidated financial results that Honda Atlas submitted to the Pakistan Stock Exchange (PSX) indicate that the company reported a profit after tax of Rs1.1 billion for the nine-month period that ended on December 31, 2022. This represents a decline of 52% compared to the same period last year, during which the company reported a profit after tax of Rs2.3 billion.
It is important to note that the company’s supply chain has been severely disrupted by the government’s stringent measures, including the restriction of LCs for importing CKD kits, raw materials, and halting foreign payments, which has contributed to the decline in profits.
Honda Atlas Cars Pakistan Ltd. reported an earnings per share (EPS) of Rs7.59 for the nine-month period that ended on December 31, 2022, which represents a decrease of 53% compared to the EPS of Rs16.20 during the same period last year.
The company’s gross profit for the same period was recorded at Rs4.3 billion, showing a 2.4% increase from Rs4.2 billion in the same period last year. This increase in gross profit was achieved by reducing the cost of sales to Rs68.4 billion, as compared to Rs73.1 billion during the same period last year.
However, the company’s profit before tax decreased by 31% to Rs2.4 billion for the nine-month period that ended on December 31, 2022, compared to Rs3.5 billion during the same period last year. This decline in profit can be attributed to the challenging economic conditions in Pakistan and the disruption to the company’s supply chain due to the government’s measures.
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