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April 27, 2010

JAPAN: Mazda returning to growth despite full year loss

Mazda Motor Corp has reported better than expected full year results, boosted by growth in its emerging markets.

Mazda Motor Corp has reported better than expected full year results, boosted by growth in its emerging markets.

The Japanese motor group said while the financial crisis had shown signs of bottoming out, business environments still remained challenging.

“In particular, the recovery of automotive industry demands still lacks momentum, except in China and other emerging markets where robust demand is observed,” said the company in a statement today (27 April).

“In addition, the trend of [a] stronger yen has continued.”

Mazda equally reported although full-year net results remained at a loss mainly due to the recognition of two reserves – from affiliate business and environmental measures respectively – in extraordinary loss the automaker’s financial performance turned profitable at all levels in the second quarter.

On a consolidated basis for the year end, net sales amounted to Y2.16bn, down 15% from the last year, due in part to lower volumes and the appreciation of the yen against other major currencies.

Operating results improved by Y37.8bn year-on-year to an operating profit of Y9.5bn. The impacts of lower volume and higher yen were more than offset by cost reduction, the company said.

Ordinary income was Y4.6bn, while net results amounted to a loss of Y6.5bn, an improvement on the Y71.5bn lost last year.

“Since the second quarter, Mazda has been reporting an increasing profit at all levels and demonstrated a solid recovery in financial performance,” the statement added.

Retail volume in Japan increased to 221,000 units, 1% year-over-year growth, because of the

introduction of New Axela (Mazda3), even though sales volume of existing models declined.

Overseas, sales in North America declined by 12% to 307,000 units. European retail reduced to 239,000 units, 26% down from the prior year, primarily due to lower sales in Russia.

In China, where sales of Mazda6 (known as Atenza in Japan) and other models were strong, retail volume was 196,000 units, 46% up year-over-year.

In other regions, retail volume was down by 4% to 230,000 units. As a result, the global retail volume was 1,193,000 units, down 5% from the prior year.

Looking ahead, the company said that global retail volume for the next fiscal year is projected to be 1,27m units, up 6% year-over-year. As for the consolidated financial performance of the next fiscal year, sales revenue is projected at ¥2,270bn, up 5% year-over-year.

Operating income and net income are projected at ¥30 billion and ¥5 billion, respectively.

“In terms of our business environments, while there is a sign of recovery in the economy, full-scale recovery in the automotive industry demand is yet to come,” noted Mazda.

“Also, appreciation of yen and material price hikes are expected. Under these circumstances, Mazda is aiming at reporting a profit at all levels in the next fiscal year by enhancing our sales efforts and continuously implementing measures to improve profitability toward developing [a] robust cost structure.”

For the full details of Mazda’s 2009 results, click here.


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