Although the coronavirus is likely to take a toll on fourth fiscal quarter and full year 2019/2020 results (it is closing its Wuhan joint venture factory with Dongfeng until at least 14 February), Honda Motor has hiked its full year operating profit forecast by JPY40.0bn to JPY730bn to reflect an increase in unit sales in Japan, lower general expenses and better foreign currency effects.
However, the automaker insisted: “The impact related to the spread of novel coronavirus infections is not reflected [in] the forecasts for [fiscal 2020/2021].”
Announcing fiscal third quarter results to 31 December, 2019, the automaker said it planned steadily improving profitability as it establishes “a business structure which generates profit more than that of the previous fiscal year”.
Q3 sales revenue nonetheless fell 5.7% year on year to JPY3,747.5bn as automobile sales fell and negative foreign currency effects chewed on the bottom line.
This was, the automaker noted, despite an increase in financial services sales and “other factors”.
Operating profit dipped 2.1% to JPY166.6bn as sales fell, model mix was less than ideal and currency effects negative.
On the other hand, Honda cut selling, general and administrative (SG&A) expenses as well continuing cost reduction programmes.
Profit before income taxes fell 8.9% to JPY206.7bn and net profit dropped a considerable 30.8% to JPY116.4bn.
The quarterly dividend will be JPY28 per share and total dividend for the full year is expected to be JPY112 per share (up HPY1 year on year).