IGI Securities Limited – Flash Note

Karachi, May 15, 2018 (PPI-OT): Automobile Assembler – HCAR: Earnings increased by +6%YoY to PKR 6.49bn (EPS: PKR 45.5) for FY18; dividend announced at PKR 22.8/sharec

Honda Atlas Cars (Pakistan) Limited (HCAR) announced its financial result for FY18 (year end March) with earnings clocking in at PKR 6.49bn (EPS: PKR 45.5) up by +6%YoY as compared to PKR 6.14bn (EPS: PKR 43.0) in the same period last year. For the 4QFY18 alone, earnings were down by +35%YoY to PKR 1.37bn (EPS: PKR 9.6) as against PKR 2.12bn (EPS: PKR 14.8) in the corresponding period last year.

The Company also announced a cash dividend of PKR 22.8/share for the full year along with the result.

Net sales jumped by +22%YoY to PKR 25.8bn during the 4QFY18 supported by high volumetric sales. As a result for the full year net sales increased by +46%YoY to PKR 91.5bn as the Company attained peak sales of ~50k units.

Gross margins for the 4QFY18 stood at 9.6%, down by 380bpsYoY which we believe is attributed to combine effect of PKR depreciation against USD (exchange loses) and increase in steel prices.

Selling and distribution cost increased massively by 2.0xYoY to PKR 0.42bn as against PKR 0.21bn in the same period last year.

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