Suzuki profit at record on brisk Asia sales

TOKYO, May 20, 2003; Reuters reported that Suzuki Motor Corp, Japan's leading minivehicle maker, on Tuesday drove to its highest ever operating profit, reporting a surge of more than 20 percent thanks to robust sales in the fast-growing Asian car market.

Group operating profit for Suzuki, one-fifth owned by General Motors Corp and Japan's fourth-largest automaker by market capitalisation, came in at 74.2 billion yen ($634 million) for the year ended March 31, in line with analysts' expectations.

It was a 27 percent climb over the previous year, boosted by the full consolidation of unit Maruti Udyog Ltd, India's biggest car company, but executives said that even without this factor operating profit rose 22 percent.

Net profit grew 39 percent to 31.02 billion yen, just shy of the record set in 1996/97. Year-on-year comparisons of net profit were not affected by Maruti's consolidation.

"We had growth in Pakistan and in Thailand, sales of both cars and motorbikes grew," Executive General Manager Katsuyoshi Suzuki told a news conference. "We also saw growth in Indonesia and in China."

The automaker also benefited from healthy sales to Nissan Motor Co and Mazda Motor Corp, which do not make their own minivehicles but badge Suzuki's cars under their own name.

The inexpensive and often boxy minicars with an engine displacement of just 660cc, around half that of a large motorbike, have become a second car for many Japanese families and account for around a third of new vehicle sales in Japan.

More record profits are expected for the current business year. Suzuki forecast a 15 percent rise in operating profit to 85 billion yen, although it said a large part of that was due to the full consolidation of its Indonesian unit, Indomobile Suzuki.

Net profit was projected to climb 13 percent to a record 35 billion yen.

The results earned a thumbs-up from analysts.

"It was a good earnings performance with not much to fault. The U.S. market wasn't that good to them but Japan and Asia did fine. Basically their cars sold well," said Seiji Sugiura, auto analyst at Nomura Securities.

"And where many other Japanese companies have recorded stock appraisal losses this earnings period, Suzuki hasn't -- illustrating the strength of their balance sheet," he said.

Suzuki's shares are up 12 percent so far this year, outperforming falls in the Nikkei share average and Tokyo's transport equipment index, helped by its relatively small exposure to pension fund-related selling and unwinding of cross-held shares