KARACHI: Honda Atlas Cars Limited profit declined 82 percent to Rs681 million for the year ended March 31, 2020, translating into LPS of Rs4.77, a statement said on Tuesday.
Honda Atlas Cars earned Rs3.851 billion with EPS of Rs26.97 in the corresponding period last year.
HCAR announced final cash dividend of 10 percent, or Re 1/share for the year ended March 31, 2020.
The significant decline in earnings in MY20 is mainly attributable to declining sales volume as volumetric sales went down by 54 percent YoY, while substantial increase in finance cost was also witnessed, compared to the previous year.
Effective tax rate for MY20 clocked in at 56 percent, which was 31 percent in MY19, which is believed to be on account of applicability of turnover tax.
For the year MY20, the company recorded finance cost of Rs727 million as compared to Rs11 million in MY19. This substantial increase in the finance cost was due to increased borrowing to fulfill higher working capital requirement on high interest rates.
Hammad Akram from Topline Securities said, “In 4QMY20, volumetric sales recorded an increase of 5 percent QoQ on the back of the New Year effect; however, gross margins declined 0.90ppts QoQ.”