Honda Atlas announces Rs1.08 billion profit

Improvement comes on back of increased gross margins

KARACHI: Beating market expectations, Honda Atlas Cars announced a net profit of Rs1.08 billion in the quarter ending on June 30, 2015, up 71% compared to the same quarter of fiscal year 2015.

Earnings per share (EPS) of the company increased to Rs7.60 from an EPS of Rs4.41 in the preceding period.

“The earnings surpassed our initial expectation of Rs840 million due to the improvement in gross profit.

“The gross profit improved by 26% year on year to Rs1.80 billion (GP margins of 15.8%) and is the main cause for significant improvement in earnings,” Global Research reported on Tuesday.

Decline in saving deposit rate following the 3 basis points (bps) cut in discount rate restricted other income of the company to Rs88 million (-4% year on year).

topline of the company improved by 1% year on year to Rs11.37 billion mainly due to 5% improvement in volumetric sales. gross profit of the company increased by 26% year on year to Rs1.80 million (GP margins of 15.8%).

localisation initiatives and depreciation in the rupee and yen contributed towards the increase.

Moreover, brief correspondence with the company’s management suggests that an increase in the plant’s useful life assumption also supported gross margin accretion during the period, the report added.

The company has incorporated one-time super tax into its earnings during the period, pushing effective corporate tax rate to 33%.

Published in The Express Tribune, July 29^th, 2015.

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