Honda Motor Co., Ltd. Reports Consolidated Financial Results
TOKYO, Oct. 28, 2002 -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal second quarter and the first half ended September 30, 2002.Second Quarter Results
Unit sales in all of Honda's business categories, namely motorcycles, automobiles and power products, increased during the fiscal second quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 1,916.7 billion (USD 15,634 million), an increase of 9.9% over the corresponding period in 2001. Revenue included 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 2001, revenue for the quarter would have increased by approximately 10.2%.
Consolidated operating income for the fiscal second quarter totaled JPY 153.0 billion (USD 1,248 million), a decrease of 6.6% compared to the corresponding period in 2001. This decrease in operating income was primarily due to increases in selling, general and administrative expenses and research and development expenses, which offset Honda's increased unit sales and ongoing cost reduction efforts.
Consolidated income before income taxes for the quarter totaled JPY 109.9 billion (USD 897 million), a decrease of 18.1% from the corresponding period in 2001.
With respect to Honda's sales in the fiscal second quarter by business category, motorcycle unit sales increased by 42.1% to 2,040,000 units, and revenue increased 12.4%, to JPY 245.9 billion (USD 2,006 million). These increases in unit sales and revenue were due primarily to robust sales in Asia, such as India, China and Indonesia.
Honda's unit sales of automobiles increased by 9.5% to 712,000 units, due to higher sales in North America and Europe. Strong sales of the Pilot new SUV, Civic, CR-V and Odyssey in North America, as well as the Jazz small car and Civic in Europe were the major contributing factors to this increase in unit sales. Revenue increased 8.6%, to JPY 1,540.1 billion (USD 12,562 million) during the quarter.
Unit sales of power products totaled 885,000 units, an increase of 15.1% compared to the corresponding period in 2001. Strong sales of general-purpose engines in North America were the major factor for this increase in unit sales. Revenue from other businesses, including the power product business and financial services business, increased by 20.9% to JPY 130.7 billion (USD 1,066 million) due mainly to higher revenue from Honda's finance subsidiaries.
First Half-Year Results
Honda's consolidated net income for the first six months ended September 30, 2002 totaled JPY 194.7 billion (USD 1,589 million), an increase of 12.1% from the previous year. Basic income per Common Share for the fiscal first half amounted to JPY 199.98 (USD 1.63), compared to JPY 178.30 of the corresponding period a year ago.
Consolidated net sales and other operating revenue for the six months amounted to JPY 3,853.6 billion (USD 31,432 million), an increase of 9.9% from last year. Revenue included the positive effect of currency translation, and Honda estimates that had the exchange rate of the yen remained unchanged from the previous year, revenue for the year would have increased by approximately 8.3%.
Consolidated operating income for the fiscal first half totaled JPY 323.8 billion (USD 2,642 million), an increase of 2.7% compared to the corresponding period last year. This increase in operating income was primarily due to an increase in unit sales and depreciation of the yen, which offset increases in selling, general and administrative expenses and research and development expenses.
Consolidated income before income taxes for the fiscal first half totaled JPY 273.7 billion (USD 2,232 million), an increase of 1.4% compared to the previous year.
With respect to Honda's sales for the fiscal first half by business category, motorcycle unit sales increased 37.8% to 3,867,000 units, and revenue increased 12.3% to JPY 497.8 billion (USD 4,061 million). Robust sales in Asian countries such as India, Indonesia and China contributed to these increases in unit sales and revenue.
Both Honda's unit sales and revenue of automobiles for the fiscal first half increased by 9.2% to 1,406,000 units, and 8.9% to JPY 3,091.5 billion (USD 25,216 million), respectively. Strong sales of the Pilot new SUV, CR-V, Civic and Odyssey in North America together with the Jazz small car and CR-V in Europe were the major contributing factors to this increase in unit sales.
Unit sales of power products totaled 2,006,000 units, an increase of 17.3% compared to the previous year. Higher sales of general-purpose engines in North America, Japan and Europe were the major factor in this increase in unit sales. Revenue from other businesses, including the power product business and financial services business, increased by 19.0% to JPY 264.2 billion (USD 2,155 million) due mainly to higher revenue from Honda's finance subsidiaries and power product business.
Forecasts for the fiscal year ending March 31, 2003
The overall global economies are expected to recover in the foreseeable future, despite fears of progressing slowdown in the U.S. economies, which is likely to affect the global economies. In contrast, competition in the Japanese market is expected to even intensify amid continuing weak consumers spending.
Under such circumstances, in regards to the forecasts of the financial results for the fiscal year ending March 31, 2003, Honda projects the consolidated and unconsolidated results as below:
FY2003 Forecasts for consolidated results
In billions of yen Changes from FY 2002
Net sales and
other operating revenue 7,900 +7.3%
Income before income taxes 580 +5.2%
Net income 410 +13.0%
FY2003 Forecasts for unconsolidated results
In billions of Yen Changes from FY2002
Net sales 3,300 +2.8%
Ordinary profit 225 +2.7%
Net income 165 +22.3%
These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the current fiscal year will average JPY 122 and JPY 113, respectively.
Honda projects that the year-end cash dividend will be JPY 16 per share of common stock. Total cash dividends for the term will be JPY 32.
This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda's actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda's control. Such factors include 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 Honda's reports filed with the U.S. Securities and Exchange Commission.