KARACHI:
Honda Atlas Cars (HCAR) has announced after-tax profit of Rs630 million in the first quarter (April-June) of current financial year, up 93% compared to Rs327 million in the same period of previous year.
Earnings per share of the company stood at Rs4.4 against Rs2.29 a year earlier.
“The result was in line with our estimated earnings of Rs575 million or EPS of Rs4, however, it beat street estimates by a big margin where consensus pointed to an EPS of between Rs2.5 and Rs3,” said BMA in a research note on Wednesday.
The rise in profit largely comes from the impact of rupee’s appreciation against the dollar on the company’s imported parts, thus leading to higher gross margins. Moreover, discontinuation of the Tenth-Generation Corolla also contributed to the increase in volumetric sales of the company, according to a Global Research report.
On a quarter-on-quarter basis, the company’s earnings remained flat in the first quarter of financial year 2014-15 (1Q FY15) despite absence of exchange gains during the period.
Net revenues depicted an increase of 4% year-on-year to Rs11.29 billion because of volumetric growth in completely knocked down (CKD) kit sales.
Improvement in sales of imported parts was supported by strong Honda City sales, which increased 23% year-on-year (8% quarter-on-quarter) to 4,155 units on account of unavailability of its competing brand, the Toyota Corolla, in the market.
Conversely, Honda Civic sales declined 12% year-on-year (8% quarter-on-quarter) owing to anticipation of an early launch of the Eleventh Generation Corolla’s 1.8-litre variant.
On a quarter-on-quarter basis, the company’s top-line registered a decline of 2% during 1Q FY15 due to lower Civic sales and a 2% cut in car prices on account of strengthening rupee against the dollar.
“Gross margin stretched to 12.7% as compared to our estimate of 11.2%. Improvement in gross margin came as the company started to realise the full impact of the cost of imported parts through a stronger rupee-dollar relationship,” Global Research said.
Other operating expenses clocked in at Rs101 million against the research house’s estimate of Rs95 million. Since the rupee-dollar parity remained range bound between 98.37 and 98.67 in the first quarter, the company may have booked an exchange loss of Rs30 million.
Published in The Express Tribune, July 24th, 2014.
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This article is intersted and I must to follow it. I can acquire knowledge in this artilce. Thank you.
Isnt this Honda Insight rather than City in the pic