HONDA ATLAS CARS (PAKISTAN) LTD.
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
June 27 - July 3, 2011
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.
FINANCIAL PERFORMANCE (RS IN MILLION)
INDICATORS MAR - 11 MAR - 10 MAR - 09 MAR - 08 Sales 22,026 15,854 14,150 14,715 Gross profit / (loss) 199 (240) 177 627 Operating (loss) / profit (93) (533) (400) 297 (Loss) / profit before tax (245) (988) (622) 64 (Loss) / profit after tax (298) (852) (402) 75
The company was incorporated in November 1992 and joint venture agreement was signed on August 1993. The company is listed on Karachi, Lahore, and Islamabad stock exchanges. On July 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad. Since then, the dealerships network has expanded to sixteen 3S and thirty 2S Pitstops network in all major cities of Pakistan.
YEAR Q1 Q2 Q3 Q4 TOTAL April 2010 to March 2011 3,960 3,967 3,801 4,712 16,440 April 2009 to March 2010 2,440 2,880 2,985 3,675 11,980
The company conducts its business responsibly and in a way to make sure health, safety, and protection from environmental aspects of its associates and the society. Honda Atlas Cars, being responsible member of the society, considers the preservation of the global environment as a crucial concern.
The company focused on efforts to increase unit sales, improve production efficiency and reduce expenses to ease pressure on cash flow and minimize losses during the period under review. The company posted 38.9 per cent growth in sales during the period. The net sales were Rs22,026.1 million against Rs15,854.1 million last year. The cost of sales was Rs21,826.8 million against Rs16,093.7 million last year. Thus, the company earned gross profit of Rs199.3 million against gross loss of Rs239.5 million in preceding year. The improvement in gross profit was attributed to better sales, cost reduction, and improved production efficiency. Due to cumulative effect of all these efforts, the company managed to minimize the loss before tax to Rs244.8 million, against Rs987.9 million in the same corresponding period last year.
The automobile industry showed strong recovery in the year under review. The better economic conditions, domestic demand, and growth in auto loans by banks led to revive the industry. The auto sector showed all-round improvement. The passenger car production improved by 26.2 per cent, the motorcycle sector showed growth of 14 per cent, followed by LCV's, buses and trucks, up by 9.7 per cent. The total production for the year ended April 2010 to March 2011 was increased by 26.2 per cent to 135,904 units against 107,648 units in the same period of last year. The sale was also up by 25.1 per cent and a total of 135,278 units were sold against 108,142 units in the same corresponding period last year.
The improvement was recorded in all three segments of automobile industry, with 34.8 per cent in cars up to 800cc, 23.9 per cent increase in the category of cars from 801cc to 1299cc and 21.6 per cent rise in the segment of 1300cc & above.
Honda atlas car always strive to give outstanding service to their valued customers. The demand of the products steadily increased 33.4 per cent, while the company produced 16,440 units against 11,980 units, up 37.2 per cent. The unit sale was also improved and a total of 16,467 units were sold against 12,344 units last year.
The beginning of the year was positive with clear signs of economic recovery. But then, the devastating floods rendered about 20 million people homeless and one fifth of the country was affected. The prices of food items pushed up CPI inflation to 15.5 per cent. Similarly, the GDP estimates scaled down to 2.8 per cent from the pre-flood estimates of 4.3 per cent. However, despite all these devastations, the economy has been showing distinct signs of recovery, as it has done in the past.
Despite the persistent energy crises and price hike of utilities in the country, the export sector showed remarkable improvement.
The exports for the period of July-March 2011 were US$17.8 billion, up 26.5 per cent over the same period last year, mainly due to rising prices of high value added textile products in the international market. The imports for the same period were also high at US$ 29.0 billion, up 15.6 per cent. Better exports, record inflow of remittances from overseas Pakistanis coupled with compensation for logistics support from US helped the country to reduce the current account deficit to two per cent of GDP, against the target of 3.4 per cent for the fiscal year 2010-11. With the robust performance of external sector, the current account deficit is expected to be around 1.5 per cent of GDP by the end of June 2011. The remittances from overseas Pakistanis for first nine months were at US$8 billion as compared to US$6.5 billion in the same period last year up 22.4 per cent.
Maintaining a global viewpoint, the company is dedicated to supplying products of the highest quality yet at a reasonable price for worldwide customer satisfaction. Honda Atlas Cars strives for supplying top quality Honda cars to mark complete customer satisfaction graph.