Karachi: In the second quarter of 2024, Hinopak Motors Limited faced significant financial challenges as revealed by their latest earnings report, marking a sharp decline in profitability despite an improvement in gross profit margins. According to information available from the Pakistan Stock Exchange (PSX), the company's latest financial figures reflect substantial changes in its operational and financial structure.

During the three-month period ending on June 30, 2024, Hinopak Motors reported a turnover of Rs. 1.92 billion, a steep decline from Rs. 7.62 billion in the previous quarter. Gross profit for the same period was Rs. 224.73 million, down from Rs. 907.89 million in March 2024, although the gross margin percentage increased from 8.5% to 11.9%. This improvement was attributed to favorable exchange impacts and revised pricing strategies.

Operating profit stood at Rs. 47.36 million, a decrease from Rs. 202.91 million in the first quarter of 2024. The company experienced a higher finance cost of Rs. 224 million primarily due to short-term borrowings. Consequently, Hinopak reported a loss before tax of Rs. 95.54 million in June 2024, compared to a loss of Rs. 36.40 million in the previous quarter.

Net losses after tax worsened, registering Rs. 119.69 million, deepening from a loss of Rs. 131.10 million in March 2024. The loss per share also deteriorated, moving from Rs. -5.29 in the first quarter to Rs. -4.83 by June 2024.

The balance sheet as of June 30, 2024, shows that total assets increased slightly to Rs. 10.12 billion from Rs. 9.96 billion in March. However, the company's equity decreased from Rs. 5.30 billion to Rs. 5.18 billion, indicating some financial pressure.

Hinopak has also undertaken significant restructuring efforts, including employee rightsizing, to streamline operations and reduce costs. These measures are part of an ongoing strategy to adapt to a shrinking market, which has seen overall unit sales decrease by 50%, from 5004 units in March 2023 to 2477 units in March 2024.