Automobile Assemblers: ATLAS HONDA LIMITED - Half Year Ended December 31 2006
The company is principally engaged in the progressive manufacturing and marketing of motorcycles and parts.
Atlas Honda Limited is one of the constituent members of a large conglomerate Atlas Group of Companies, having diversified interests in car assembling, auto spares, auto batteries, assembly of motorcycles, mutual fund and investment bank etc.
The company was incorporated as a public limited company on October 16, 1962. Its registered office is situated at Mcleod Road Lahore and its factories are located in SITE Karachi (Sindh) and district Sheikhupura (Punjab).
Its shares are quoted at Karachi and Lahore stock exchanges. The share in the company is invariably trading at quite high price at the stock market as during the last 52 weeks the highest/lowest price of the share remained between Rs 108.10 and Rs 260 per share.
Recently on June 11, 2007, the closing price of Atlas Honda share was recorded at Rs 131 per share which works out to nearly 13 times of the par value. As regard operating result, during the half year ended December 31, 2006 (HYD-06-07) the company posted sales revenue at Rs 7.995 billion as compared to Rs 8.341 billion in the same period last year (SPLY), registering 4.15% decline.
The Chairman of the company Yusuf H. Shirazi explained about the sluggish demand of the product during couple of months. During the first half the units sales were lower than the last corresponding period by 6.1%. The major reason for the slower offtake has been the devastating floods that affected the rural areas and the disappointing performance of the cash crops. The rain also affected the urban centers so its sales in the first two months were slow. However September onwards figures reflect substantial recovery.
On the other hand the gross profit margin for HYD06-07 decreased to 8.89% from 8.92% in SPLY as can be seen from the company's "Performance Statistics" appended below. The Chairman while enumerating the reasons for the eroding margin stated that it was due to sales volume down, unfavourable currency exchange rate and unprecedented rise in raw material and utility cost.
However, the net impact more or less had been offset by cost rationalisation, benefits of localisation (of parts and components) and efficient funds management (Atlas Group) has a very efficient team of fund managers. In line with the increase in sales the selling and administrative expanses to increase. It was the sharp rise in finance cost which depressed pretax profit it has been reported that, the increase in interest rates and additional borrowing for capacity expansion and new projects led to increase in finance cost at Rs 127.67 million as against Rs 75.57 million in SPLY. Resultantly, for the six months profit before tax decreased to Rs 350.34 million (SPLY: Rs 464.58 million) and after tax profit to Rs 221.82 million (SPLY: Rs 300.56 million).
The chairman foresees that Pakistan has still untapped market and huge unfulfilled demand for motorcycles.
================================================================
Performance Statistics (Million Rupees)
================================================================
Balance Sheet -As At-
================================================================
December 31 June 30
2006 2006
================================================================
Un-audited Audited
================================================================
Share Capital-Paid-up: 411.29 357.64
Reserves & Surplus: 2,204.88 2,248.29
Shareholders Equity: 2,616.17 2,605.93
L.T. Debts: 1,438.11 1,599.09
Deferred Liabilities: 531.82 419.69
Current Liabilities: 3,591.51 3,011.45
Fixed Assets Tangible: 3,650.49 3,598.73
Intangible Assets: 22.84 29.09
L.T. Loans & Advances: 17.82 17.10
L.T. Deposits & Prepayments: 5.84 11.02
Current Assets: 4,480.62 3,974.22
Total Assets: 8,177.61 7,630.16
================================================================
Profit & Loss A/c for the Half Year End -December 31-
================================================================
2006 2005
================================================================
Sales: 7,995.12 8,341.25
Gross Profit: 710.63 743.73
Operating Profit: 436.03 494.55
Other Operating Income: 69.05 77.63
Finance (Cost): (127.67) (75.57)
Profit Before Taxation: 350.34 464.58
Profit After Taxation: 221.82 300.56
Earnings Per Share (Rs): 5.39 7.31
Share Price (Rs) on 11/06/2007: 131 -
Price/Earning Ratio: 24.30 -
Debt/Equity Ratio: 35:65 38:62
Current Ratio: 1.25 1.32
Gross Profit Margin (%): 8.89 8.91
Net Profit Margin (%): 2.77 3.60
R.O.A. (%): 2.71 3.94
R.O.E. (%): 8.47 11.53
================================================================
COMPANY INFORMATION: Chairman: Yusuf H. Shirazi; Chief Executive Officer: Saquib H. Shirazi; Director: Sherali Mundrawala; Company Secretary: Zaryab Tarique; Registered Office: 1-Mcleod Road, Lahore-54000; Website URL: www.atlashonda.com.pk; Factories: F-36 Estate Avenue, S.I.T.E Karachi 75730
26-KM Lahore Sheikhupura Road Sheikhupura 39321 (Punjab).
Comments
Comments are closed for this article.