Despite lower sales, the profit-after-tax (PAT) of Honda Atlas Cars (Pakistan) Limited (HCAR) clocked in at Rs675.34 million in the second quarter (July-September) of its fiscal year 2023-24, as compared to losses of Rs385.29 million recorded in the same period of the previous year.
As per HCAR’s financial statements made available at the Pakistan Stock Exchange (PSX) on Wednesday, the automobile company’s earnings per share (EPS) stood at Rs4.73 in 2QFY24, compared to a loss per share (LPS) of Rs2.70 last year.
The profit can be attributed to an increase in the automaker’s gross profit and a decline in operating expenses during 2QFY24.
In a note, Topline Securities said that while earnings were lower than industry expectations, the announcement of a nil dividend was in line with expectations.
During 2QFY24, HCAR’s sales declined to Rs13.96 billion, as compared to Rs19.55 billion in SPLY, a plunge of 29%.
However, despite lower sales, the company reported a gross profit of Rs1.53 billion in 2QFY24, a jump of nearly 127%, as compared to a gross profit of Rs673.4 million in SPLY. Resultantly, HCAR’s gross margins rose to 11% in 2QFY24, as compared to only 3% in SPLY.
Moreover, the company witnessed a significant decline in its operating expenses which stood at Rs21.82 million in 2QFY24, lower by 96%, as compared to Rs514.34 million in SPLY.
HCAR saw an improvement in its other income, which amounted to Rs896.57 million in 2QFY24, in comparison to Rs787.7 million in 2QFY23.
The company managed to post Profit before Taxation (PBT) of Rs1.504 billion in 2QFY24, up by 846% YoY.
Incorporated in Pakistan as a public limited company in 1992, HCAR commenced its commercial operations in 1994. The company was formed as a result of a joint venture between Honda Motor Co., Ltd., Japan and Atlas Group of Companies, Pakistan.
The company is engaged in the assembly and progressive manufacturing and sale of Honda vehicles and spare parts.