Honda Atlas Cars (Pakistan) Limited (HCAR) has reported a remarkable 797 per cent increase in profit-after-tax (PAT), achieving Rs2.33 billion for the fiscal year ending March 31, 2024, despite experiencing a significant drop in sales.

This is a substantial increase compared to the Rs260.14 million PAT recorded in the previous year.

The financial statements, released at the Pakistan Stock Exchange (PSX) on Wednesday, show that HCAR’s earnings per share (EPS) soared to Rs16.34, up from Rs1.82 the previous year. 

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The company’s Board of Directors has also announced a final cash dividend of Rs6.5 per share, equivalent to 65 per cent, in contrast to the previous year’s nil dividend.

The impressive rise in profit is mainly attributed to a significant reduction in other expenses and lower taxation during the period.

Sales for the year fell by over 42 per cent, from Rs95.08 billion last year to Rs55.07 billion. As a result, the company’s gross profit declined by over 37 per cent, from Rs7.16 billion to Rs4.51 billion. Nevertheless, HCAR’s gross margins improved, rising to 8.2 per cent from last year’s 7.5 per cent.

There was a 12 per cent increase in administrative expenses, which amounted to Rs1.48 billion, up from Rs1.32 billion in the previous year. However, other expenses saw a dramatic 92 per cent reduction, falling to Rs393.6 million from Rs4.93 billion.

The finance cost also rose significantly by over 252 per cent, reaching Rs1.22 billion compared to Rs346.1 million last year.

HCAR reported a profit before taxation (PBT) of Rs2.75 billion, a nearly 39 per cent year-on-year increase. Despite this higher PAT, the company’s tax payments dropped nearly 76 per cent, amounting to Rs418.85 million, down from Rs1.72 billion last year.