Honda Motor Co., Ltd. (NYSE: HMC) today announced its consolidated financial results for the fiscal fourth quarter and the year ended March 31, 2000.
Fourth Quarter Results
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Honda’s consolidated net income for the fiscal fourth quarter ended March 31, 2000 totaled Yen 62.7 billion ($591 million), a decrease of 11.9% from the same period in 1999. Net income per Common Share, both on a basic and fully diluted basis, for the quarter amounted to Yen 64.37 ($0.61), compared to Yen 73.04 of the same period in 1999. Each of Honda’s American Depositary Shares represents two Common Shares.
Unit sales in all of Honda’s business segments, namely motorcycles, automobiles and power products, increased during the quarter and consolidated net sales and other operating revenue (herein referred to as “revenue”) for the quarter amounted to Yen 1,617.9 billion ($15,242 million), an increase of 1.0% from the same period in 1999. Revenue includes currency translation effects, which had a negative impact on foreign currency-denominated revenue from Honda’s overseas subsidiaries translated into yen. Honda estimates that had the exchange rate of yen remained unchanged from the same period in 1999, then revenue for the fourth quarter would have increased by approximately 8.1%.
Consolidated operating income for the quarter totaled Yen 90.9 billion ($856 million), a decrease of 20.4% compared to the same period in 1999. Despite Honda’s increased unit sales and ongoing cost reduction efforts, the negative impact of the appreciation of the yen was the major factor for this decrease in operating income.
Consolidated income before income taxes for the quarter totaled Yen 85.2 billion ($803 million), decreasing 17.2% from the same period in 1999.
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By GlobalDataWith respect to Honda’s sales in the fourth quarter taken by business segment, motorcycle unit sales increased 9.4% to 1,227,000 units, and revenue increased 1.5%, to Yen 216.5 billion ($2,040 million). This increase in unit sales was due primarily to higher sales in Asia, particularly in Indonesia and Thailand.
Honda’s unit sales of automobiles increased by 6.5% to 658,000 units, and revenue increased 1.4%, to Yen 1,287.8 billion ($12,132 million) during the fourth quarter. This increase in unit sales was primarily due to strong sales of the Odyssey and the Civic in North America.
Unit sales of power products showed strong growth, totaling 1,295,000 units, an increase of 15.2% compared to the same period in 1999. Honda’s general-purpose engines in North America and Europe contributed to the increase in unit sales. Revenue from other businesses, including the power product business and financial services, decreased by 4.5% to Yen 113.5 billion ($1,070 million).
Fiscal Year Results
Honda’s consolidated net income for the year ended March 31, 2000 totaled Yen 262.4 billion ($2,472 million), a decrease of 14.0% from the previous year. Net income per Common Share, both on a basic and fully diluted basis, for the year amounted to Yen 269.31 ($2.54), compared to Yen 313.05 for the previous year.
Unit sales in all of Honda’s business segments, namely motorcycles, automobiles and power products, increased and consolidated net sales and other operating revenue (herein referred to as “revenue”) for the year amounted to Yen 6,098.8 billion ($57,455 million), a decrease of 2.1% from the previous year.
This decline in revenue was due primarily to the effect of currency translation. Honda estimates that had the exchange rate of the yen remained unchanged from the previous year, then revenue for the year would have increased by approximately 7.9%.
Consolidated operating income for the year totaled Yen 426.2 billion ($4,015 million), a decrease of 22.3% compared to the previous year. This was primarily due to the substantial appreciation of the yen.
Consolidated income before income taxes for the year totaled Yen 416.0 billion ($3,920 million), a decrease of 20.1% compared to the previous year.
With respect to Honda’s sales in the fiscal year by business segment, motorcycle unit sales increased 3.3% to 4,436,000 units, while revenue decreased 11.0% to Yen 718.9 billion ($6,773 million). Unit sales in Asia, particularly in Indonesia and India, as well as in North America, grew during the period.
Honda’s unit sales of automobile increased by 6.0% to 2,473,000 units, while revenue decreased 0.6% to Yen 4,961.0 billion ($46,736 million) for the fiscal year. Favorable sales of automobiles, in particular the Odyssey and the Acura TL in North America and minivehicles such as the Vamos and Life in Japan, were the primary contributors to this increase in unit sales.
Unit sales of power products showed strong growth throughout the world, totaling 4,057,000 units, representing an increase of 18.9% compared to the previous year. Strong sales of general-purpose engines in North America and Europe were the major contributors to this increase in unit sales. Honda’s other businesses, including power products and financial services, suffered a 3.6% decrease in revenue, amounting to Yen 418.9 billion ($3,946 million).
Forecast for Fiscal Year ending March 31, 2001
With reference to the Company’s forecast for the fiscal year ending March 31, 2001, although the economies of Asian countries are expected to continue to recover, economic growth in the United States and Europe is expected to be unpredictable and yen is expected to continue to appreciate against the major foreign currencies. It will take some time for consumer spending in Japan to recover. Due to a business environment expected to be severe, in view of changes in the automotive industry and tougher sales competition, the Company forecasts a slight increase in consolidated net sales and other operating revenue, while it forecasts that income before income taxes and net income will decrease as follows:
First half ending September 30, 2000 Changes from previous year
Net sales and other operating revenue
Yen 3,080 billion +1.6%
Income before income taxes
Yen 160 billion -29.3%
Net income
Yen 100 billion -26.7%
Fiscal year ending March 31, 2001 Changes from previous year
Net sales and other operating revenue
Yen 6,200 billion +1.7%
Income before income taxes
Yen 300 billion -27.9%
Net income
Yen 190 billion -27.6%
These forecasts are based on the assumption that exchange rates of the yen against the U.S. dollar and the euro for the current fiscal year will average Yen 105 and Yen 100, respectively.
This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. The Company’s actual results could differ materially from those contained in these forward-looking statements as a result of numerous factors outside of the Company’s control, including general economic conditions in Honda’s principal markets and foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in the Company’s reports filed with the U.S. Securities and Exchange Commission.
