Atlas Honda sees impressive 94% YoY profit surge

July 10, 2024

Ayesha Mudassar

Atlas Honda Limited (ATLH), one of Pakistan’s largest motorcycle manufacturers, witnessed a substantial boost of around 94% in its earnings during the year ended March 31, 2024, reporting a net profit of Rs9.7 billion compared to a profit of Rs5.0 billion last year, reports WealthPK. The company observes its fiscal year from April to March. ATLH’s top line increased by 18% year-on-year (YoY) to Rs159.2 billion compared to Rs135.4 billion in 2023. This rise was mainly due to the company’s sound market position and a reliable customer base.

Furthermore, the company’s gross profit improved by 26% YoY to Rs12.2 billion due to a better sales mix, stable exchange rate and other cost reduction measures. Other income increased by 99% to Rs9.06 billion. This rise can be attributed to efficient treasury operations because of higher liquidity and elevated interest rates. On the expense side, the company observed a rise in its administrative costs by 25% YoY and selling and marketing expenses by 20% YoY to clock in at Rs1.07 billion and Rs3.6 billion, respectively, during the review period. On the other hand, other operating expenses of Atlas Honda were reduced significantly by 66% YoY to Rs735.2 million.

The company’s finance cost rose by 34% YoY and stood at Rs102 million as compared to Rs76 million last year, mainly due to higher interest rates. On the tax front, the company paid a higher tax worth Rs6.03 billion against Rs3.09 billion paid in 2023, depicting a rise of 95% YoY. During the year, the company contributed an amount of Rs38 billion to the government and its agencies on account of various taxes and levies. ATLH continuously strived towards productivity enhancement, process optimisation, and cost reduction. This included localisation of Completely Knocked Down (CKD) kits, modifications of tools, and establishment of production dashboards.

Motorcycle industry

The motorcycle industry witnessed a decline of over 22% due to import restrictions, inflationary pressures and economic slowdown. However, better agricultural cashflows, continued foreign remittances, and fuel-efficient mobility options will gradually revive the demand for motorcycles.

Company description

Atlas Honda was incorporated as a public limited company on October 16, 1962. The company is principally engaged in progressive manufacturing and marketing of motorcycles and spare parts.

Future outlook

The positive momentum in macroeconomics signals promising growth prospects and improved business sentiments. The establishment of the Special Investment Facilitation Council and engagement with the International Monetary Fund to conclude the long-term bailout package will surely attract greater investment, ensure stability and foster sectoral growth.

Credit: INP-WealthPk