Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Fourth Quarter and the Fiscal Year Ended March 31, 2004
TOKYO, April 27 -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal fourth quarter and the fiscal year ended March 31, 2004.
Fourth Quarter Results
Honda's consolidated net income for the fiscal fourth quarter ended March 31, 2004 totaled JPY 74.1 billion (USD 701 million), a decrease of 36.5% from the corresponding period in 2003. Basic net income per Common Share for the quarter amounted to JPY 78.47 (USD 0.74), compared to JPY 120.86 for the same period in 2003. Two of Honda's American Depositary Shares represent one Common Share.
Unit sales in all of Honda's business categories relating to products, namely motorcycles, automobiles and power products, increased during the fiscal fourth quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,144.9 billion (USD 20,294 million), increased by 0.8% over the corresponding period in 2003. Revenue included a negative effect of currency translation, caused by translation of foreign currency denominated revenue from Honda's overseas subsidiaries into yen. Honda estimates that if the exchange rate of yen had remained unchanged from that in the corresponding period in 2003, revenue for the quarter would have increased by approximately 5.5%.
Consolidated operating income for the fiscal fourth quarter totaled JPY 137.1 billion (USD 1,298 million), a decrease of 43.3% compared to the corresponding period in 2003. This decrease in operating income was primarily due to the negative impacts of depreciation of U.S. dollar and an increase in selling, general and administrative (SG&A) expenses, which offset positive impacts of ongoing cost reduction effects.
Consolidated income before income taxes for the quarter totaled JPY 106.4 billion (USD 1,007 million), a decrease of 40.0% from the corresponding period in 2003.
With respect to Honda's sales in the fiscal fourth quarter by business category, motorcycle unit sales increased by 26.7% to 2,620 thousand units, and revenue increased 12.1%, to JPY 294.8 billion (USD 2,790 million).
Honda's unit sales of automobiles for the quarter increased by 1.7% to 793 thousand units. Revenue decreased 1.0%, to JPY 1,694.3 billion (USD 16,031 million).
Revenue from financial services for the quarter decreased 4.1% to JPY 58.6 billion (USD 555 million).
Unit sales of power products for the quarter totaled 1,788 thousand units, an increase of 4.2% compared to the corresponding period in 2003. Revenue from power products and other businesses increased by 4.0% to JPY 99.8 billion (USD 945 million).
Fiscal Year Results
Honda's consolidated net income for the year ended March 31, 2004 totaled JPY 464.3 billion (USD 4,393 million), an increase of 8.8% from the previous
year. Basic net income per Common Share for the year amounted to JPY 486.91 (USD 4.61), compared to JPY 439.43 for the previous year.
Consolidated net sales and other operating revenue for the year amounted to JPY 8,162.6 billion (USD 77,232 million), an increase of 2.4% from last year. Revenue included a negative effect of currency translation caused by translation of foreign currency denominated revenue from Honda's overseas subsidiaries into yen, Honda estimates that if the exchange rate of yen had remained unchanged from that in the previous year, revenue for the year would have increased by approximately 6.4%.
Consolidated operating income for the year totaled JPY 600.1 billion (USD 5,678 million), a decrease of 17.2% compared to the previous year. This decrease in operating income was primarily due to negative impacts of depreciation of U.S. dollar and an increase in selling, general and administrative (SG&A) expenses, which offset positive impacts of increased revenue from increased unit sales and ongoing cost reduction effects.
Consolidated income before income taxes for the year totaled JPY 641.9 billion (USD 6,074 million), an increase of 5.3% compared to the previous year.
With respect to Honda's sales for the year by business category, motorcycle unit sales increased 13.9% to 9,206 thousand units. In Japan, unit sales of motorcycles decreased 6.7% to 403 thousand units, while overseas unit sales increased 15.1% to 8,803 thousand units. Revenue from motorcycle business increased 1.9% to JPY 996.2 billion (USD 9,427 million) due primarily to increased sales. Operating income decreased 25.9% to JPY 42.4 billion (USD 401 million).
Honda's unit sales related to automobiles for the year increased by 3.3% to 2,983 thousand units. Of them, unit sales in Japan decreased 15.7% to 716 thousand units, and overseas unit sales increased 11.2% to 2,267 thousand units. Revenue from automobile business also increased 2.4% to JPY 6,592.0 billion (USD 62,371 million) due mainly to increase in overseas unit sales, which offset the negative impact of appreciation of yen. Operating income decreased 20.4% to JPY 438.8 billion (USD 4,153 million).
Revenue from financial services increased 2.0% to JPY 245.8 billion (USD 2,326 million).
Operating income was JPY 108.4 billion (USD 1,026 million), increased by 0.6% from the previous year.
For power products, unit sales for the year was increased by 10.1% to 5,047 thousand units compared with the previous year. Of them, unit sales in Japan totaled 477 thousand units, increased by 1.1% from the previous year, and overseas unit sales increased 11.1% to 4,570 thousand units, due primarily to increased sales in North America. Revenue from power product and other businesses increased by 4.7% to JPY 341.6 billion (USD 3,233 million) due mainly to increased sales in power products. Operating income increased 28.3% to JPY 10.3 billion (USD 98 million).
With respect to Honda's sales for the year by geographic segment, in Japan, revenue was JPY 3,930.8 billion (USD 37,192 million), almost the same level as the previous year, with increased sales in automobile export offsetting decreased domestic sales. Operating income in Japan was JPY 192.4 billion (USD 1,821 million), almost the same level as the previous year.
In North America, revenue decreased by 0.8% from the previous year to JPY 4,673.0 billion (USD 44,214 million), due to negative impact of appreciation of yen against U.S. dollar, although unit sales in motorcycles, automobiles and power products increased. Operating income in North America decreased by 30.2% to JPY 310.1 billion (USD 2,935 million) from the previous year.
In Europe, revenue for the year increased by 15.0% to JPY 948.5 billion (USD 8,975 million) compared to the previous year, due mainly to increased unit sales in automobiles, as well as a positive impact of currency translation effects. Operating income in Europe increased by 78.3% to JPY 25.8 billion (USD 245 million).
In Asia, revenue increased by 34.6% to JPY 704.1 billion (USD 6,663 million) from the previous year, due mainly to continued strong sales in motorcycle and automobile businesses. Operating income also increased by 18.2% to JPY 44.6 billion (USD 423 million) from the previous year.
Revenue from Other regions for the year increased by 26.9% to JPY 348.2 billion (USD 3,295 million) compared to the previous year, due to increased unit sales in automobiles, motorcycles and power products. Operating income increased by 2.5% to JPY 23.7 billion (USD 225 million) from the previous year.
Forecasts for the fiscal year ending March 31, 2005
The economy of the U.S. is showing its recovery, while consumer spending for later this fiscal year ending March 31, 2005 may be expected to slowdown. On the other hand, Asian and other regions are expected to show stable. However, management environment is still under difficult conditions attributable to global political and economic uncertainty and currency movements. Competition in the Japanese market is expected to intensify amid continuing weak consumer spending.
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, 2005, Honda projects consolidated results as to be below:
First half ending September 30, 2004
In billions of yen Changes from FY 2004
Net sales and other operating revenue 4,180 +3.8%
Income before income taxes 255 +23.2%
Net income 195 -18.5%
Fiscal year ending March 31, 2005
In billions of yen Changes from FY 2004
Net sales and other operating revenue 8,500 +4.1%
Income before income taxes 500 -22.1%
Net income 390 -16.0%
These forecasts are based on the assumption that the average exchange rates for yen to U.S. dollar and euro for the fiscal year ending March 31, 2005 will be JPY 105 and JPY 125, respectively.