Honda Atlas Cars profit surges 72pc in Q1

KARACHI: Honda Atlas Cars (HCAR) on Tuesday reported a 72 percent surged in its net profit in the first quarter of current financial year as sales increase.
In a statement to the Karachi Stock Exchange, the company reported a net profit of Rs1.1 billion for the quarter ended June 30, up from Rs600 million in same period of the last year.
The company skipped an interim dividend as the profits fell 32 percent from the last quarter of the last financial year “mainly due to one-time tax reversal,” analysts said.
The company reported an improved gross profits of Rs.1.8 billion during the period as compare to Rs.1.4billion in 1Q 2014.
Analysts said the result beat market expectations.
They said the company’s revenue increased by one percent year-on-year to Rs.11.4billion due to 5 percent volumetric increase in sales.
Earnings per share stood at Rs.7.6 during the quarter as compare to EPS of Rs 4.4 in the same period last year.
Analyst Muhammad Tahir Saeed at Topline Securities said selling and distribution cost came down by one percent YoY that helped the company to post operating profit of Rs1.6 billion, up 27 percent YoY and up 36 percent QoQ.
“We attribute this improvement to the favorable exchange rate of US dollar and rupee against Japanese yen, up 16 percent YoY and 13 percent YoY, respectively,” Saeed said.
Analysts said HCAR sold 7,217 units in the quarter as compared to 6,882 units in the same period last year.
“Relatively low price Honda City sales grew 22 percent YoY while Honda Civic sales were down 21 percent YoY in 1Q2016,” Saeed said.
He said a subdued effective tax rate of 33 percent in 1Q, a decline of 18 percent YoY, also supported net profits of the company.