Mitsubishi Motors Corporation (MMC) was finally back in the black in the third quarter of its fiscal year ending 31 March 2007 at all levels (operating, ordinary and net profits) since the company started disclosing quarterly results in fiscal 2004.
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The automaker posted an operating profit of 6.4bn yen for the nine months to 31 December, 24.6bn yen better than the same period last fiscal year.
Factors contributing to the improvement included a limited impact on profitability due to a greater ratio of built-up vehicles in overall volume though sales fell; improved profitability of financial service operations in the United States (a key cause of big losses several years ago); favourable foreign exchange rate movements; and reductions in selling expenses.
Hoeever, MMC posted an ordinary loss of 6.4bn yen, marking a year-on-year gain of 27.4bn yen that stemmed in part from an improvement in net interest income.
The company reported a net loss of 11.8bn yen for the nine months, an improvement of 56.3bn yen due to the elimination of asset impairment charges in Japan and of restructuring charges booked last year; and extraordinary earnings stemming from the dissolution of a special purpose entity.
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By GlobalDataConsolidated net sales in the first fiscal three quarters totalled one trillion 544.1bn yen, up 14.5bn yen year on year (one trillion 529.6bn yen).
The gain was due primarily to increased sales of built-up vehicles and from favourable exchange rates which offset declines in OEM supply volumes due to the end of production of the Smart Forfour model at NedCar in the Netherlands and in shipments of parts for local production in North Asia and ASEAN countries. MMC said in a statement.
Global retail sales of vehicles in the first nine months of fiscal 2006 totaled 899,000 vehicles, a decline of 86,000 on the 985,000 sold in the same period a year ago.
In Japan, MMC sold 170,000 vehicles, a year-on-year increase of 7,000 that reflected continuing stable sales of the Outlander SUV, and volume gains from the introduction last year of the new i minicar and Pajero models.
In North America, the company sold 123,000 vehicles, 2,000 more than the same period in fiscal 2005. The new locally-made Eclipse Spyder launched in April and the full-scale launch of the Outlander SUV in November last year helped the boost, MMC said.
In Europe, Mitsubishi Motors sold 206,000 vehicles, a year-on-year increase of 11,000, as strong sales in Russia and a doubling of sales in the Ukraine offset slower sales in Germany and the UK.
But it wasn’t such good news in Asia and ‘other markets’ where sales were off 106,000 to 400,000 vehicles year on year.
“Firm sales in Latin America, the Middle East, and Africa failed to offset a sharp decline in shipments of parts for local production in Taiwan, China and countries in the ASEAN block,” MMC said.
Despite what it calls “an increasingly challenging global market”, MMC aims to return to full-year net profit “through the implementation of profit-oriented marketing initiatives”, adding it stands by the full-year forecasts of net sales of 2,230bn yen, ordinary profit of 21bn yen and net profit of 8bn yen.
Graeme Roberts
