Karachi: Honda Atlas Cars (Pakistan) Limited has released its condensed interim financial statements for the nine-month period ending December 31, 2024. The company has demonstrated resilience and growth in a challenging economic environment, attributed to improved macroeconomic conditions in Pakistan.
The Chairman of Honda Atlas Cars expressed satisfaction with the company's financial results, highlighting the positive momentum in Pakistan's economy as a key factor. The country's GDP growth is projected to accelerate to 3.4% in FY25, up from 2.5% in the previous year, driven by supportive monetary policies and structural reforms.
According to the financial statements, Honda Atlas Cars reported a profit before taxation of Rs. 1.80 billion for the nine-month period ending December 31, 2024, compared to Rs. 2.00 billion in 2023. The total revenue reserves increased to Rs. 18.96 billion, reflecting the company's strong financial position.
On the external front, Pakistan's current account posted a surplus of USD 1.21 billion during the first half of FY25, a significant improvement from a deficit of USD 1.40 billion in the same period last year. The country's exports grew by 7.2%, reaching USD 16.20 billion, helping to narrow the trade deficit to USD 11.50 billion. Additionally, home remittances saw robust year-on-year growth of 32.8%, reaching USD 17.80 billion, which contributed to an increase in foreign exchange reserves to USD 16.40 billion.
Pakistan's inflation rate, as measured by the Consumer Price Index (CPI), declined to 4.1% in December 2024. This allowed the State Bank of Pakistan to reduce the policy rate by 200 basis points to 13%, marking a cumulative reduction of 900 basis points since June 2024. Consequently, the PSX 100 index reached historic highs, surpassing 115,000 points. However, fiscal collections fell short of the estimated target by Rs. 386 billion.
In the automobile industry, the reduction in interest rates lowered borrowing costs, stimulating consumer financing and boosting market activity. The lifting of restrictions on the opening of Letters of Credit (LCs) resolved supply chain disruptions and enabled manufacturers to meet rising demand. The industry has seen a recovery since September 2024, supported by a stable exchange rate and favorable government policies.
The financial position of Honda Atlas Cars as of December 31, 2024, shows total equity and liabilities at Rs. 44.55 billion, compared to Rs. 49.83 billion in March 2024. The company reported significant working capital changes, with a notable decrease in stock-in-trade and trade debts, reflecting improved operational efficiency.
According to information available from the Pakistan Stock Exchange (PSX), the automotive sector, including Honda Atlas Cars, has benefited from the easing of monetary policy, contributing to a broader growth trajectory. The Large-Scale Manufacturing Industries (LSMI) sector in Pakistan recorded a contraction of 1.25% during the first five months of FY25, but the automotive industry showed significant expansion.
Honda Atlas Cars' financial results indicate a positive outlook, with investments in technological advancements and innovative solutions expected to drive future growth. The company's focus on adapting to emerging trends aligns with the broader economic recovery in Pakistan, positioning it well for sustained success in the automotive market.