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January 29, 2016

Honda Q3 operating profit falls 22.3%

Honda Motor operating profit for the fiscal third quarter to 31 December, 2015 fell 22.3% to JPY163bn yen due, the automaker said, "to profit-reducing factors such as an increase in selling, general and administrative (SG&A) expenses that include quality-related expenses and unfavorable currency effects". This would include considerable expense related to ongoing Takata airbag recalls.

Honda Motor operating profit for the fiscal third quarter to 31 December, 2015 fell 22.3% to JPY163bn yen due, the automaker said, “to profit-reducing factors such as an increase in selling, general and administrative (SG&A) expenses that include quality-related expenses and unfavorable currency effects”. This would include considerable expense related to ongoing Takata airbag recalls.

Honda said it boosted sales volume, improved model mix and made cost reduction efforts.

Operating profit for the fiscal nine months fell 3% to 567.2bn for the same reasons. Profit attributable to owners of the parent rose 2.4% to JPY437.9bn.

Despite favorable currency effects associated with depreciation of the Japanese yen, reflecting the latest forecast for consolidated unit sales, Honda has revised down its forecast for consolidated sales revenue for the current fiscal year tp 31 March, 2016 by JPY50bn to JPY14.55 trillion. Thanks to cost-reduction efforts, the forecast for consolidated operating profit for the current fiscal year will remain unchanged from the previous JPY685bn. This is despite a decline in consolidated unit sales, an increase in quality-related expenses and unfavorable currency effects reflecting recent trends with the currencies of emerging countries. The forecasts for consolidated profit before income taxes and profit for the current fiscal year attributable to owners of the parent will remain unchanged from the forecasts announced previously.

Honda sold 1,228,000 automobiles in the third quarter, up from 1,174,000 the previous year, and 3,514,000 fiscal year to date, up from 3,298,000.

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