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JAPAN: Mazda H1 profits up, outlook cautious

By just-auto.com editorial team | 2 November 2007

Mazda Motor Corporation has boosted consolidated operating profit 5% year-on-year to 73.1bn yen. for the first half of fiscal year 2007/8 ended 30 September.

Consolidated sales revenue was up 9% to 1,656.2bn yen while consolidated net income rose 7% to 29.1bn yen.

The Ford affiliate has left its full-year forecasts unchanged.

It attributed its to strong H1 sales to the continuing success of the 3 and the launch of the redesigned Demio/2, which led to an increase in unit sales volume, and the impact of the depreciation of the Japanese yen on major currencies.

Operating profit increased due to cost cutting initiatives and the impact of the weaker yen, which offset increased investments in R&D and capital equipment.

Global retail volume was up just 1% to 659,000 units in the first half.

Japanese sales fell 6% to 123,000 units but market share increased 0.2 points to 5.0%, thanks to sales of the Demio which have exceeded targets since its July launch.

Sales in North America rose 7% year-on-year to 213,000 units. European volume remained at 153,000 units as a decline in demand in Germany was offset by improved sales in Russia.

In China, local production of Mazda brand vehicles in Hainan ceased, resulting in a 33% decrease in sales to 41,000 units compared to the prior fiscal year.

Record sales in Australia, Israel, Venezuela and Ecuador led sales in other overseas markets, which rose 18% year-on-year to 129,000 units.

Mazda chairman president and CEO, Hisakazu Imaki, said: "With profits across the board increasing for the first half of fiscal year 2007, Mazda's performance has exceeded our initial forecasts.

"The Mazda Advancement Plan has had a smooth start but we recognise that we have a number of challenges ahead. We are therefore being prudent in our outlook, having given careful consideration to potential challenging external operating factors, such as the sub-prime mortgage issue, the crude oil and raw materials price hike impact, as well as fluctuating exchange rates. However, we see no reason to change our full-year projections and, looking ahead, we are confident that we will achieve our targets and continue Mazda's steady growth."

For the full year, Mazda is expecting sales revenue up 2% to 3,320bn yen, operating profit up 1% to 160.0bn yen and net income up 15% to 85.0bn yen.