May 25, 2021 (MLN): Honda Atlas Cars (Pakistan) Limited has declared net profits of Rs 1.79 billion (EPS: Rs 12.56) for the year ended March 31, 2021, depicting a 2.6x YoY increase when compared to the profits of Rs 681 million (EPS: Rs 4.77) recorded in the same period of last year.
Along with the results, the company also announced a final cash dividend of Rs 4.52 per share for the year as compared to Re 1 per share declared last year.
This improvement in earnings can be attributed to higher volumetric sales on the back of resumption of economic activities and lower finance costs amid the reduction of interest rate by 625 bps.
As per the official financial report issued to PSX, the top-line earnings of the company increased by 22.4% YoY due to higher vehicle prices and an increase in sales volumes by 7% YoY to 24,027 units compared to 22,407 units in ME20 while the cost of sales rose by 25% YoY. Accordingly, gross margin shrank from 7.4% to 5.6% during the said period which was offset by lower other expenses (down by 77.4% YoY).
According to a research note by Arif Habib Limited (AHL), despite the appreciation of PKR, the decline in margins came on account of higher duties and a surge in prices of imported raw materials (steel).
Meanwhile, other income surged by 44%YoY to Rs 918 million due to an increase in short-term investments and cash & bank balances, it added.
During the period under review, the finance cost of the company plunged by 84% to Rs 116 million due to a lower interest rate regime.
As per AHL sources, the launch of the new Honda City is going to be a key catalyst as the company is already receiving an overwhelming response from customers and has already received 3 months booking (approximately 6,000 units) with the first unit being expected to roll out in August’21.
|
Profit and Loss statement for the year ended March 31, 2021 ('000 Rupees) |
|||
|
|
Mar-21 |
Mar-20 |
% Change |
|
Sales |
67,362,307 |
55,046,264 |
22.37% |
|
Cost of sales |
(63,586,363) |
(50,955,042) |
24.79% |
|
Gross profit |
3,775,944 |
4,091,222 |
-7.71% |
|
Distribution & marketing cost |
(736,974) |
(667,901) |
10.34% |
|
Administrative expenses |
(823,588) |
(738,757) |
11.48% |
|
Other income |
918,484 |
638,618 |
43.82% |
|
Other operating expenses |
(237,080) |
(1,048,538) |
-77.39% |
|
Profit from operations |
2,896,786 |
2,274,644 |
27.35% |
|
Finance cost |
(116,159) |
(727,444) |
-84.03% |
|
Profit before taxation |
2,780,627 |
1,547,200 |
79.72% |
|
Taxation |
(987,422) |
(865,448) |
14.09% |
|
Profit after taxation |
1,793,205 |
681,752 |
163.03% |
|
Earnings per share – basic and diluted |
12.56 |
4.77 |
163.31% |
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