Honda Atlas Cars (Pakistan) Limited (HCAR) has announced a remarkable financial performance for the first quarter of the fiscal year 2024-25, showcasing a significant rise in profit-after-tax (PAT) by nearly 40%. The PAT for the quarter ended June 30, 2024, reached Rs202.63 million, compared to Rs144.96 million in the same period last year. This impressive increase in profit can be largely attributed to a substantial surge in sales.
According to HCAR’s financial statements released at the Pakistan Stock Exchange (PSX) on Wednesday, the company’s earnings per share (EPS) stood at Rs1.42 during the quarter, a notable increase from the EPS of Rs1.02 recorded in the corresponding period of the previous year.
During the quarter, HCAR’s sales soared to an impressive Rs15.97 billion, a staggering 324% increase compared to Rs3.77 billion in the same period last year. This dramatic rise in sales significantly contributed to the company’s overall profitability.
HCAR reported a gross profit of Rs1.01 billion in Q1 FY2024-25, reversing a gross loss of Rs148.4 million from the same period last year. The gross margins for the quarter stood at 6.3%, showcasing a strong recovery and efficient cost management.
Despite the impressive revenue growth, HCAR experienced a rise in administrative expenses, which increased by 44% to Rs392.15 million in Q1 FY2024-25 from Rs271.92 million in the same period last year. This increase in expenses reflects the higher operational costs associated with the surge in sales.
On the downside, HCAR’s other income saw a significant decline of nearly 62%, amounting to Rs343.77 million in Q1 FY2024-25, compared to Rs902.69 million in the corresponding period last year. Additionally, the company’s finance costs jumped exponentially by 557%, reaching Rs287.09 million, up from Rs43.67 million last year. The increase in finance costs is primarily due to the rise in interest rates during the period.
Despite these challenges, HCAR managed to post a profit before taxation (PBT) of Rs383.3 million in Q1 FY2024-25, marking a 43% year-on-year increase. This growth reflects the company’s resilience and ability to navigate through financial fluctuations while maintaining profitability.
Incorporated in Pakistan as a public limited company in 1992, Honda Atlas Cars (Pakistan) Limited commenced its commercial operations in 1994. The company was established through a joint venture between Honda Motor Co., Ltd., Japan, and Atlas Group of Companies, Pakistan. HCAR is engaged in the assembly, progressive manufacturing, and sale of Honda vehicles and spare parts across the country.
HCAR’s robust financial performance in the first quarter of FY2024-25 underscores its strong market position and operational efficiency. The significant increase in sales and subsequent rise in profit indicate a positive outlook for the company, despite the challenges posed by rising administrative expenses and finance costs.
As HCAR continues to expand its market presence and improve operational efficiencies, it remains well-positioned to capitalize on the growing demand for automobiles in Pakistan. The company’s strategic focus on enhancing its product offerings and customer service will likely contribute to sustained growth in the coming quarters.
To further bolster its market position, HCAR is expected to continue investing in new technologies and innovations. These investments will enhance the company’s manufacturing capabilities and ensure the production of high-quality vehicles that meet the evolving preferences of Pakistani consumers. Additionally, HCAR’s commitment to sustainability and environmental responsibility will likely play a crucial role in its long-term growth strategy.
