Honda Atlas Cars (Pakistan) Limited (HCAR) witnesses an extraordinary surge in profits, marking an increase of almost 800%. Despite a notable decline in sales, HCAR’s profit-after-tax (PAT) ascended to a remarkable Rs2.33 billion for the fiscal year ending March 31, 2024, as opposed to a mere Rs260.14 million in the previous year.
Published by DailyDosz.
Financial reports unveiled at the Pakistan Stock Exchange (PSX) on Wednesday showcased a substantial rise in earnings per share (EPS) to Rs16.34 compared to Rs1.82 in the previous fiscal year. Moreover, the Board of Directors announced a final cash dividend of Rs6.5 per share, a stark contrast to last year’s nil per share dividend.
This surge in profits can be attributed to a significant reduction in other expenses and a decrease in taxation during the period.
Honda Sales
Despite the surge in profits, HCAR’s sales plummeted to Rs55.07 billion from Rs95.08 billion in the same period, marking a staggering decline of over 42%. Consequently, the company reported a gross profit of Rs4.51 billion for FY24, a decrease of over 37% from Rs7.16 billion in the previous fiscal year. However, despite lower gross profits, HCAR’s gross margins saw an increase to 8.2% in FY24 from 7.5% previously.
Furthermore, the company observed a surge in administrative expenses, reaching Rs1.48 billion for FY24, a 12% increase from Rs1.32 billion in the same period last year. However, HCAR witnessed a massive decline of 92% in other expenses, totaling Rs393.6 million for FY24 compared to Rs4.93 billion in FY23.
HCAR also experienced a significant rise in finance costs, soaring over 252% to Rs1.22 billion in FY24 from Rs346.1 million in the previous fiscal year. Despite these challenges, the company managed to achieve a Profit before Taxation (PBT) of Rs2.75 billion, up nearly 39% year-on-year.
However, despite higher profits, HCAR’s tax payments for FY24 amounted to only Rs418.85 million compared to Rs1.72 billion in the previous year, reflecting a decline of nearly 76%.
Established as a public limited company in 1992, HCAR commenced its commercial operations in 1994 through a joint venture between Honda Motor Co., Ltd., Japan, and Atlas Group of Companies, Pakistan. The company primarily focuses on automobile assembly.