Despite an increase in sales, the profit-after-tax (PAT) of Honda Atlas Cars (Pakistan) Limited (HCAR) declined nearly 62%, clocking in at a mere Rs257.74 million in the quarter ended September 30 of fiscal year 2024-25 compared to PAT of Rs675.34 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 Friday, the automobile company’s earnings per share (EPS) stood at Rs1.80 during the quarter, compared to an EPS of Rs4.73 last year.

The decline in profit can be attributed to an increase in the cost of sales.

During the quarter, HCAR’s sales clocked in at Rs16.59 billion, compared to Rs13.96 billion in SPLY, an increase of 19%.

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However, despite higher sales, the company’s gross profit decreased by 20%, clocking in at Rs1.22 billion in 1QFY25 as compared to a gross profit of Rs1.53 billion in SPLY. The decline in profit comes amid a 24% increase in cost of sales, which stood at Rs15.34 billion during 1QFY25.

Consequently, HCAR’s gross margins lowered to 7.35% in 1QFY25, compared to 10.94% in same period last year.

As per the latest Pakistan Automotive Manufacturers Association (PAMA) data, HCAR sold nearly 5,000 passenger cars and LCVs during the first four months of the ongoing fiscal year, an increase of 64% year-on-year.

In addition, the automobile company witnessed a jump in its administrative expenses which stood at Rs437.92 million in 1QFY25, up by 14%, as compared to Rs382.6 million in SPLY.

On the other hand, HCAR’s other income registered a decline of nearly 91%, amounting to a meagre Rs84.85 million in 1QFY25, in comparison to Rs896.57 million in 1QFY24.

The automaker also saw its finance cost jump by 61%, standing at Rs193.3 million in 1QFY25, as compared to Rs120.16 million in SPLY.

As a result, the company posted a Profit before Taxation (PBT) of Rs364.5 million in 1QFY25, down by 76% 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.