Business

Honda posts 12% increase in first-quarter profit

Honda Motor Co. said Wednesday its group net profit for the April-June quarter rose 12.2 percent from a year earlier to a record 114.2 billion yen, due mainly to robust sales in Asia and Europe.

The company achieved record consolidated sales of 2.07 trillion yen, up 3.2 percent from the previous year, while its group operating profit rose 0.3 percent to 159.9 billion yen.

Although the yen’s appreciation against the dollar cost the firm 41.9 billion yen in operating profit, increased revenues and vigorous cost-reduction efforts offset the negative impact of the exchange rate, Honda said.

In terms of sales volume, the automaker’s global car sales grew 9 percent to a record 772,000 units, thanks to thriving sales in Asia, Europe and Japan.

In Asia outside Japan, Honda sold 122,000 vehicles in the first quarter, up 54.4 percent from the previous year. The Accord and Fit Saloon sedans enjoyed brisk sales in the region.

Honda’s sales in Europe surged 17.8 percent to 66,000 units.

Domestic sales almost remained flat at 154,000, as strong demand for the new Odyssey minivan, the Elysion luxury minivan and the Life compact covered the falling sales of the Fit compact, which was a big hit in 2003.

Honda revised upward it’s earnings projection for the year to March, expecting a net profit of 417 billion yen, up 6.9 percent from its April projection, and record sales of 8.5 trillion yen, up 0.7 percent.

But the earnings projections are still lower than the previous year’s earnings, as Honda expects its net profit to fall 10.2 percent due to the strengthening yen.

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