AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: ATBA recently held a corporate briefing session to discuss its financial performance and strategic outlook. The company reported a significant 93% year-on-year decline in earnings, amounting to Rs91 million, which translates into an earnings per share of Rs2.60. During the session, several key points were highlighted regarding the company’s financial results and future strategies.
The company’s topline for the fiscal year 2025 was around Rs35 billion, a 15% decline compared to the previous year. This decrease was mainly attributed to a 10% drop in sales volume of the Atlas Maintenance-Free Battery in the replacement market and a noticeable consumer shift from heavy to medium-sized batteries, which offer lower profit margins.
Management noted that the shift in sales mix has adversely affected the company’s gross margins, which decreased by 3 percentage points year-on-year to 11% in FY25. The company anticipates continued pressure on margins unless there is a rebound in demand for heavy batteries.
To maintain its market share in Pakistan’s battery sector, where ATBA holds approximately 20% of a 10 million-unit market, the company is focusing on cost optimization. Notably, 80-90% of any cost savings, including a 3% reduction in total costs, will be passed on to consumers to maintain competitive pricing. The company did not implement any price hikes during FY25.
ATBA plans to enter the lithium-ion battery market with a pilot rollout expected within the next 12 months. Management highlighted that while the entry requires minimal capital expenditure, it also suggests limited barriers for competitors.
The company undertook several financial restructuring initiatives during FY25, significantly reducing inventory levels by 35% and trade receivables by 15%. These measures helped reduce short-term borrowings by 51%. Additionally, ATBA secured a Rs1 billion loan at KIBOR +0.1% to transition its debt from short-term to long-term obligations.
ATBA expressed concern over the growing presence of imported lithium-ion batteries in the solar segment, which benefits traders over manufacturers. Approximately 20 traders import these batteries from China, assemble them locally, and sell them, posing a challenge to domestic producers.
Looking ahead, ATBA aims to sustain its current topline through diversification and expansion into export markets. The company recently added Yemen to its export destinations and is exploring opportunities in African and Middle Eastern markets.