Honda Motor’s fiscal second quarter and first half financial results released on Monday (31 October) make for grim reading with automobile unit sales, sales revenue, operating profit and net profit all down sharply year on year as the impacts of the March Japanese earthquake and yen appreciation hit the books.
And there’s worse to come. Floods have halted car production in Thailand – for six months, according to the Nikkei at the weekend. Honda has so far said only it did not have “a clear outlook for when production will resume as flooding on its facilities has continued”.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
But it has acknowledged it will take a full year financial hit: “Honda is currently evaluating the extent of the damage resulting from the floods, and it is not possible to reasonably estimate the impacts on the consolidated and unconsolidated financial results at this time,” today’s results statement said.
“Therefore, forecasts of the consolidated and unconsolidated financial results for the fiscal year ending 31 March, 2012 are not determined. Honda will release the forecasts as soon as they become available.”
Operating income and net income for the fiscal second quarter (to 30 September) were JPY52.5bn and JPY60.4bn respectively, down 68% from JPY163.4bn and off 56% from JPY135.9bn respectively in 2010. These results, nonetheless, exceeded Honda’s previous forecasts of JPY27.4bn and JPY18.2bn yen respectively. A Reuters poll of 13 analysts had estimated operating profit off 61%.
Honda said lower automobile unit sales (772,000 versus 898,000 in the second quarter; 1.319m vs 1.797m in H1) were due to parts shortages caused by the March Japan earthquake and negative effects of yen appreciation.
The Japanese government on Monday moved to limit the currency’s appreciation after it hit a record high against the US dollar.
Sales revenue fell 16.3% from JPY2,251.9bn to JPY1,885.8bn in the second quarter and 22% from JPY4,613.3 to JPY3600.4bn in the first half.
As previously announced, the quarterly dividend for the fiscal second quarter will be JPY15 per share, up JPY3.
“Despite the impact of the flooding in Thailand, at this moment, the forecast for the total annual dividend per share… will remain as JPY60,” Honda said.
