Honda Posts Record Profit
TOKYO, April 25 -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal fourth quarter and the fiscal year ended March 31, 2003.
Fourth Quarter Results
Honda's consolidated net income for the fiscal fourth quarter ended March 31, 2003 totaled a record high, JPY 116.7 billion (USD 971 million), an increase of 9.4% from the same period in 2002. Basic net income per Common Share for the quarter amounted to JPY 120.86 (USD 1.01), compared to JPY 109.51 for the same period in 2002. Two of Honda's American Depositary Shares represent one Common Share.
Unit sales in all Honda's business categories, namely motorcycles, automobiles and power products, increased for the fiscal fourth quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") amounted to JPY 2,128.6 billion (USD 17,709 million), an increase of 1.3% over the corresponding period in 2002.
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 the yen remained unchanged from the same period in 2002, revenue for the quarter would have increased by approximately 7.2%.
Consolidated operating income for the fiscal fourth quarter totaled JPY 206.6 billion (USD 1,719 million), an increase of 22.0% compared to the same period in 2002.
This increase in operating income was due mainly to higher revenue from strong automobile sales in North America. In addition, Honda's ongoing cost cutting strategies also contributed to this increase. These positive impacts offset negative impacts, such as appreciation of the yen, increases in selling, general and administrative (SG&A) expenses as well as research and development (R&D) expenses.
Consolidated income before income taxes for the quarter totaled JPY 177.3 billion (USD 1,475 million), an increase of 10.2% from the same period in 2002.
With respect to Honda's sales in the fiscal fourth quarter by business category, motorcycle unit sales increased 18.0% to 2,068,000 units and revenue decreased 12.7%, to JPY 263.0 billion (USD 2,188 million).
Honda's unit sales of automobiles increased by 7.4% to 780,000 units, due primarily to strong sales in North America. As a result, revenue increased 3.0%, to JPY 1,711.1 billion (USD 14,236 million) during the quarter.
Unit sales of power products totaled 1,716,000 units, an increase of 20.1% compared to the corresponding period in 2002. Favorable sales of Honda's general-purpose engines in Europe and North America contributed to this increase. Revenue from other businesses, including the power product business and financial services, increased by 12.0% to JPY 154.4 billion (USD 1,285 million) due mainly to higher revenue from financial services led by favorable automobile sales in North America.
Fiscal Year Results
Honda's consolidated net income for the year ended March 31, 2003 set a record high totaling JPY 426.6 billion (USD 3,550 million), an increase of 17.6% from the corresponding period of last year. Basic net income per Common Share for the year amounted to JPY 439.43 (USD 3.66), compared to JPY 372.23 for the corresponding period a year ago.
Unit sales of Honda's motorcycles, automobiles and power products increased and revenue for the year amounted to JPY 7,971.4 billion (USD 66,319 million), an increase of 8.3% from last year.
Revenue included negative 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 9.1%.
Consolidated operating income for the year totaled JPY 689.4 billion (USD 5,736 million), an increase of 7.8% compared to the corresponding period last year. Higher revenue from the automobile business, Honda's continuing cost cutting strategies and weaker yen were the major contributing factors in this increase in operating income.
Consolidated income before income taxes for the year totaled JPY 609.7 billion (USD 5,073 million), an increase of 10.6% compared to the previous year.
With respect to Honda's sales for the fiscal year by business category, motorcycle unit sales increased by 32.6% to 8,080,000 units, and revenue increased 3.2% to JPY 978.0 billion (USD 8,137 million). Higher sales in Asia outside Japan mainly contributed to this increase.
Honda's unit sales of automobiles increased by 8.3% to 2,888,000 units, and revenue increased 8.6% to JPY 6,440.0 billion (USD 53,578 million) from the previous fiscal year. Strong sales in North America and Asia outside Japan contributed to this increase in unit sales.
Unit sales of power products totaled 4,584,000 units, an increase of 16.8% compared to the corresponding period of the previous year. This is due mainly to increased unit sales of general-purpose engines in Europe and North America. Revenue from other businesses, including power products and financial services, showed a 14.1% increase, amounting to JPY 553.3 billion (USD 4,603 million).
Forecasts for the fiscal year ending March 31, 2004
Fears of a progressing slowdown in the U.S. economies, and its impact on the global business environment are anticipated to increase, and competition in the Japanese market is expected to intensify amid continuing weak consumer spending. Other global concerns, including Iraqi issues, are also expected to affect the overall global economies. In these circumstances, Honda expects competition in each of its markets to remain challenging. In regard to the forecasts of the financial results for the fiscal year ending March 31, 2004, Honda projects consolidated results as to be below:
First half ending September 30, 2003
In billions Changes from
of yen FY 2003
Net sales and other operating revenue 4,050 +5.1%
Income before income taxes 270 -1.4%
Net income 195 +0.1%
Fiscal year ending March 31, 2004
In billions Changes from
of Yen FY 2003
Net sales 8,300 +4.1%
Income before income taxes 620 +1.7%
Net income 440 +3.1%
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 116 and JPY 125, respectively.