HCAR hits it out of the park with 40% profit surge

July 24, 2024 (MLN): Honda Atlas Cars (Pakistan) Limited (PSX: HCAR) recorded an increase of 40% YoY in its profits for the quarter ended June 2024, with the company's after-tax profits rising to Rs202.62 million [EPS: Rs1.42] mainly on the back of robust increase in sales which reported a 4.23x surge during the review quarter.

That compares with a profit of Rs145m [EPS: Rs1.02] earned in the previous year.

It is important to note that the revenue of the company stood at Rs15.97bn, up by a 4.23x YoY increase as compared to Rs3.77bn in the same period previous year.

The cost of sales also soared by 3.8x YoY but was less than proportionate to sales increase, which turned the gross loss of last year into profit of Rs1bn in the review quarter.

The gross margins, therefore, improved to 6.33% as compared to -4% in SPLY.

During the period under review, other income deflated by 62% YoY to stand at Rs343m in the quarter ended June 2024 as compared to Rs902m in SPLY.

On the expense side, the company's distribution and marketing costs rose 85% YoY to Rs259.4m, while administrative expenses rose 44% YoY to Rs392m.

On the other hand, the company's other expenses increased 7.67% YoY to just Rs33.36m.

Meanwhile, HCAR's finance cost surged by 6.5x YoY to stand at Rs287m as compared to Rs43.67m in the previous year, mainly due to higher interest rates.

The company paid a notably higher tax worth Rs180.69m against the Rs122.7m paid in the corresponding period of last year.

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