JAPAN: Mitsubishi profits rise, forecast falls
Despite closing its Australian car assembly plant and some "impairments" in North America and Japan, Mitsubishi Motors has posted rises in sales and profits for fiscal year 2008.
Consolidated sales rose 22% to 2JPY.682bn yen as global retail sales grew 10%, OEM vehicle supplies to PSA Peugeot Citroen began and yen exchange rates were favourable.
Operating profit rose 2.7-fold to JPY108.6bn, ordinary profit 4.6 times to JPY85.7bn and net income by JPY26bn to 34.7bn yen.
"Fiscal 2007/8 marks the second consecutive year that Mitsubishi Motors has posted surpluses at all levels (operating, ordinary and net profits) for the full financial year and indicates the company has achieved its aim of establishing a profitable financial and operating structure. In addition, both the operating and ordinary income figures for fiscal 2007 represent new highs in the history of the company," the automaker said in a statement.
Global retail sales of vehicles in fiscal 2007 rose 10% to 1,359,000 vehicles.
But sales fell 11% in Japan to 219,000 units "in a difficult domestic market which showed no signs of recovery".
North America sales rose 5% to 172,000 but MMC noted that volume slipped during the second half of the year, impacted by the sub-prime credit crunch, which has brought greater uncertainty to the prospects for the American market, along with fiercer competition.
But strong sales of the Outlander and Lancer models, particularly in the first half of the year, and a 51% increase in sales in Canada (which MMC entered only relatively recently) helped the increase for the full year.
In Europe sales were up 21% to 341,000 driven by continuing brisk business in Russia which saw a 54% year-on-year increase in sales to top 100,000 units for the year, by a doubling of sales in Ukraine for the second consecutive year, and by a strong 44%-plus increase in sales in central Europe.
In Asia and other regions, Mitsubishi Motors sold 627,000 vehicles, a 17% increase. Firm sales of the Triton pickup and Pajero SUV in Latin America, the Middle East and Africa were complemented by increases in Thailand, Indonesia, the Philippines and other countries in the region.
In fiscal 2008/9 Mitsubishi Motors has targeted a 3% increase to 1,128,000 units in world market sales of built-up vehicles as it promotes sales of its global models. In light of declining export shipments of parts for assembly in North Asia and ASEAN nations, and expected declines in Japan and North America where demand is flat, the company forecasts total global retail sales volume of 1,309,000 units, 4% or 50,000 units down compared to fiscal 2007/8.
The company expects a 5% fall in Japan to 207,000 vehicles, a 16% drop in North America to 145,000 (due partly to the company's repositioning of Puerto Rican sales to its Asia and other region) a 14% rise in Europe to 388,000, and a 9% drop in Asia and other to 569,000 due partly to the impact of lower export shipments of parts to Proton in Malaysia, which is to cease assembly of Mitsubishi-based cars.
MMC has forecast net sales of JPY2.650bn yen, a 1% decrease and operating profit of 60bn yen, 48.6bn yen down on fiscal 2007, due to factors such as the substantial weakening of the Japanese yen and sharp increases in raw material costs.
"The company will minimise the impact of these factors with higher earnings from increased sales volumes and more profitable model mixes in its Europe and Asia and other regions, as well as by reducing material costs and by implementing operational restructuring," MMC said.
Full-year net profit is seen at JPY20bn, JPY14.7bn down on fiscal 2007.