Honda Atlas Cars’ profit nosedived 82% to Rs681.8 million for the year ended March 31, 2020, because of a fall in sales volume while finance cost remained sharply higher.
According to a notification sent by the corporate to the Pakistan stock market on Tuesday, Honda Atlas had reported a profit of Rs3.85 billion within the previous year. Earnings per share of Atlas Honda fell to Rs4.77 in Apr-Mar FY20 as against Rs26.97 within the previous year.
The automaker announced a final cash dividend of Re1 per share for the year ended March 31, 2020. the income of the corporate was recorded at Rs55 billion, down 42% compared to Rs95.1 billion within the previous year.
According to Topline Research analyst Hammad Akram, the many declines in earnings for Honda Atlas within the year under review was mainly due to the declining sales volume as volumetric sales dropped 54% on a year-on-year basis.
He added that a considerable increase in finance cost was also witnessed during the year compared to the previous year. The cost of the corporate registered a decrease of 28% from Rs931.8 million within the previous year to Rs668 million within the period under review.
Finance cost soared 6,401% to Rs727.4 million compared to Rs11.2 million last year. “The substantial rise in finance cost was because of increased borrowing to fulfill the higher capital requirement at high-interest rates,” the analyst said.
According to the Topline Research report, Atlas Honda booked effective taxation of 56% against 31% last year mainly on account of the applicability of turnover tax.