Honda Motor Co. said Friday that group sales, operating profit and net profit marked record highs for the business year ended March 31, thanks to brisk overseas sales.
But the automaker sharply lowered its earnings forecast for the 2008 business year to reflect the dollar’s slide against the yen and surging raw materials costs.
For the latest year, Honda logged ¥12.0 trillion in group sales, up 8.3 percent from the previous year, marking its eighth consecutive year of record sales. Operating profit rose 11.9 percent to ¥953.1 billion.
It logged a ¥600 billion group net profit, up 1.3 percent from a year earlier, after reserving ¥80 billion for a future corporate tax charge. The reserve was based on U.S. accounting standards, after the Tokyo Regional Taxation Bureau pointed out that the automaker had underestimated profits earned from four-wheel business in China for five years until March 2006.
“We are in discussions (with the tax bureau), and can’t disclose the details,” Executive Vice President Koichi Kondo told a news conference.
Honda forecasts a 31.8 percent dorp in group operating profit to ¥650 billion for the current business year, with group net profit coming in at ¥490 billion, down 18.3 percent.
The dollar’s fall against the yen weighed heavily on Honda’s forecast, which was based on an exchange rate of ¥100 to the dollar and ¥155 to the euro. Last year, the dollar averaged ¥114 and the euro ¥162.
Honda said a higher yen will shave its operating profit by as much as ¥303 billion this business year, while hikes in raw materials costs will force the company to reduce its operating profit by ¥49 billion.
Record MMC profits
Mitsubishi Motors Corp. said Friday it posted record high group operating and pretax profits in the 2007 business year on sales growth of 21.8 percent over the previous year.
Mitsubishi Motors reported a consolidated operating profit of ¥108.60 billion, up 169.9 percent from the year before, and pretax profit of ¥85.73 billion, up 362.3 percent, on sales of ¥2.68 trillion.
The automaker sold about 1.359 million vehicles in the global market in the year ended March 31, up 10.5 percent. Although sales sagged 11.3 percent in its domestic market, they grew 4.7 percent in North America, 20.6 percent in Europe and 16.8 percent in the rest of Asia and other regions.
On top of robust sales, a deal to supply vehicles to PSA Peugeot Citroen under an original equipment manufacturing agreement and foreign-exchange fluctuations contributed to the increase in profits, it said.
Mitsubishi Motors’ net profit came to ¥34.71 billion, up 296.9 percent, or ¥6 per share, up from ¥1 the year before.
For the current business year, Mitsubishi Motors projects a net profit of ¥20 billion, a pretax profit of ¥48 billion and an operating profit of ¥60 billion on sales of ¥2.65 trillion, down 1.2 percent.