Honda Atlas Cars (HCAR) on Wednesday posted a net profit of Rs441 million for the nine-month period ended December 2013 , against just Rs10 million in the corresponding period of the previous year. Earnings per share (EPS) of the company for the period improved to Rs3.09 compared to just Rs0.07 in the previous year. The third quarter (October to December 2013 ) went well for the company, which saw it earn Rs127 million or EPS of Rs0.89 , up 57% against Rs81 million in the corresponding quarter of the previous year. The revenue of the company for the nine-month period improved to Rs27.62 billion , up 42% from Rs19.51 billion , supported by sales volumes that shot up by 33%. However, on a quarter on quarter (QoQ) basis, sales volumes in the third quarter (3Q) declined (3,685 units against 3,872units in second quarter of 2013 (2QMY13). Analysts say the jump in margins and earnings for the company were due to the launch of new models of Honda Civic and City about a year-and-a-half ago. On the other hand, sharp depreciation of Pak rupee against the dollar and the yen led to exchange losses (particularly in second quarter) which resulted in higher operating expenses (up 77% to Rs714 million ), Sherman Securities commented on Wednesday. BMA Research said that it expects the volumes of the company to recover in the coming period due to the New Year phenomenon (car sales usually jump in first few months every year). Furthermore, a depreciating yen against the rupee and positive effects of December 2013 increase in car prices by Honda Cars would help the company’s margins to grow. Honda Atlas turned a profit in FY13 by earning Rs244 million after posting losses for four consecutive years. Last year, it declared a dividend of Rs0.25 per share for the whole year - the first cash payout after a gap of seven years. In FY13, Honda Atlas’ sales rose a healthy 75% to 21,235 units compared to 12,119 units a year earlier. The boost came primarily because of higher production during the year compared to the previous year when production slowed down after floods in Thailand . The company imports most of its parts from Thailand . Honda Atlas is the smallest player in the Pakistan market compared to Pak Suzuki Motor , the market leader, and Indus Motor , the makers of Toyota Corolla. However, Honda Atlas saw its sales jump in the previous fiscal year ended June 30, 2013 while sales of Pak Suzuki and Indus dropped 33% and 31% respectively.
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