Honda has posted a set of financial results that show profits dragged down by restructuring costs and unfavourable currency effects. However, the company forecasts a 770bn yen operating profit – a 6% gain – for the current fiscal year (ening March 31, 2020) due to the positive impact of ongoing cost reduction efforts.
Honda said that consolidated sales revenue for the fiscal year (April 1, 2018 through March 31, 2019) amounted to 15,888.6 billion yen, an increase of 3.4% compared to the previous fiscal year and an all-time fiscal year record.
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However, consolidated operating profit for the fiscal year was down by 12.9% at 726.3 billion yen, due 'primarily to the impact to Europe related to changes of the global automobile production network and capability as well as unfavourable currency effects'.
Consolidated profit before income taxes for the fiscal year amounted to 979.3 billion yen, a decrease of 12.2% compared to the previous fiscal year.
Consolidated sales revenue for the fiscal fourth quarter (January 1, 2019 through March 31, 2019) amounted to 4,049.1 billion yen, an increase of 3.4% compared to the same period last year, due primarily to an increase in sales revenue from automobile and financial services businesses. Consolidated operating profit for the fiscal fourth quarter amounted to 42.3 billion yen, a decrease of 66.6% compared to the same period last year, due primarily to the impact to Europe related to changes of the global automobile production network and capability as well as unfavourable currency effects. This, Honda said, was despite the positive effect of cost reduction efforts.
Consolidated profit before income taxes for the fiscal fourth quarter amounted to 111.1 billion yen, a decrease of 41.7% compared to the same period last year. Consolidated loss for the fiscal fourth quarter attributable to owners of the parent amounted to 13.0 billion yen, resulting in a decrease in profit by 120.7 billion yen compared to the same period last year.
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By GlobalDataHonda is planning a renewed focus on cost reduction out to 2025 with a global saving of as much as 10% on the back of a reduced number of model variations as well as further changes to its global manufacturing network.
By 2025, Honda says it will reduce the total number of variations at the trim and option level for global models to one-third of what it has now.
The company also says that it will reduce the number of manhours for the development of mass-production models by 30%, and will 'repurpose those manhours to accelerate our research and development in advanced areas for the future'.
Honda CEO sets out automaker's EV stall and global model rationalisation
