Mazda Motor Corporation boosted operating profit 28% to 107.3bn yen in the first nine months of its fiscal year and has revised its operating profit outlook for the full-year to 31 March upwards to 158bn yen, up 28%.
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Revenue in the first nine months rose 9% year on year to 2,289.6bn yen and operating profit increased by 23.6bn yen to 107.3bn, up 28% year-on-year.
Mazda said this was due to an improved product mix, cost cutting efforts and the positive currency effects of a depreciation in the Japanese yen, which offset higher raw materials prices.
Ordinary profit increased 23% to 83.9bn yen and net income was 42.1bn yen, up 2% over FY2005. However, excluding the one-time impact of an extraordinary gain from the transfer of pension fund liabilities and asset-impairment losses reflected in last year’s results, net income was up 26% compared with the 2005.
Due to an accident involving a car-carrying vessel near the Aleutian Islands of Alaska in July 2006, an extraordinary loss, net of projected insurance coverage, was recorded in the third quarter.
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By GlobalDataDespite strong sales of mini vehicles, Mazda retail sales in Japan were down 8% to 182,000 units. In the United States, sales reached 202,000 units, a 4% increase year-on-year, primarily due to new models such as the CX-7 crossover, the 5 minivan and the MX-5 Miata roadster.
Strong demand in Europe for 5 and 6 diesel models, in addition to the MX-5, led to a retail volume of 219,000 units, an 11% increase, Mazda said.
In China, what Mazda called a “tough competitive environment” resulted in a 4% decrease in sales to 98,000 units.
The results statement made no mention, however, of the bureaucratic snafu which halted sales and, consequently, production of the locally-assembled 3 line in China for nine months last year.
Total wholesales for first nine months of the fiscal year were higher in North America and Europe but offset by lower demand in Japan and other regions, resulting in consolidated wholesales of 829,000 units, down 1%.
For FY2006, Mazda is forecasting all year-on-year profits to be at record levels for a sixth consecutive year. Global revenues are forecast at 3,200.0bn yen, up 10% on FY2005.
Operating profit is forecast to reach 158.0bn yen, a 28% improvement, and ordinary profit is forecast to grow by 28%, reaching 130.0bn yen. Full-year net income is projected to rise 9% to 73.0bn yen.
Based on the results for the first nine months of the fiscal year, Mazda has revised the projections it announced in November 2006. Due to the impact of revised unit volumes, exchange rate assumptions and fixed costs, full-year projections for sales revenues and operating profit have been revised upward and forecasts for ordinary profit and net income have been revised down.
In addition, with revised sales estimates for Japan and other regions, consolidated wholesales are projected to increase 2% over FY2005 figures to 1.17m units.
Mazda representative director and chief financial officer David Friedman said in a statement: “Mazda’s financial results for the first nine months of fiscal 2006 reflect progress despite challenging business conditions.
We are pleased to see that our operating margin has improved to 4.7%, up 0.7 points over last year. With less than two months remaining in the Mazda Momentum plan, we will continue to focus on steady improvement as we move forward in building a solid foundation for Mazda’s future.”
