Honda Motor Co., Ltd. Reports Consolidated Financial Results For the Fiscal First Quarter Ended June 30, 2009
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TOKYO, July 29 -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal first quarter ended June 30, 2009.
First Quarter Results
Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal first quarter ended June 30, 2009 totaled JPY 7.5 billion (USD 79 million), a decrease of 95.6% from the same period in 2008. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 4.17 (USD 0.04), a decrease of JPY 91.39 from JPY 95.56 for the corresponding period last year. One Honda American Depository Share represents one common share.
Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,002.2 billion (USD 20,854 million), a decrease of 30.2% from the same period in 2008, primarily due to decreased revenue in the automobile business and unfavorable currency translation effects. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2008, revenue for the quarter would have decreased by approximately 20.7%.
Consolidated operating income for the quarter totaled JPY 25.1 billion (USD 262 million), a decrease of 88.0%, due primarily to decreased profit attributable to decreased revenue, the increase in fixed costs per unit as a result of reduced production and the unfavorable impact of currency effects caused by the appreciation of the Japanese yen, despite decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.
Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 5.4 billion (USD 57 million), a decrease of 97.6% from the same period in 2008.
Equity in income of affiliates amounted to JPY 14.2 billion (USD 148 million) for the quarter, a decrease of 62.7% from the corresponding period last year.
Financial Highlights
Yen (millions)
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Three months ended Three months ended
Jun. 30, 2008 Jun. 30, 2009
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Net sales and other
operating revenue 2,867,221 2,002,212
Operating income 210,476 25,164
Income before income
taxes and equity in
income of affiliates 224,224 5,458
Net income attributable
to Honda Motor Co., Ltd. 173,397 7,560
Yen
-------------
Basic net income
attributable to Honda
Motor Co., Ltd. per
common share 95.56 4.17
Business Segment
With respect to Honda's sales for the fiscal first quarter by business segment, motorcycle unit sales totaled 2,252 thousand units, a decrease of 17.1% from the same period last year. Unit sales in Japan totaled 45 thousand units, a decrease of 22.4% compared to the same period last year. Outside of Japan, total unit sales was 2,207 thousand units, a decrease of 16.9% from the same period in 2008*, due mainly to a decrease in sales of motorcycle knocked-down parts for local production at Asian affiliates accounted for under the equity method and decreased unit sales in Other regions including South America, more than offsetting increased unit sales in India and Vietnam. Revenue from sales to external customers decreased 34.8%, to JPY 256.3 billion (USD 2,670 million) from the same period last year, due mainly to decreased unit sales and unfavorable currency translation effects. Operating income decreased 81.9% to JPY 5.6 billion (USD 59 million) from the same period last year, due primarily to decreased profit attributable to decreased revenue and the unfavorable impact of currency effects, more than offsetting decreased SG&A expenses and R&D expenses.
*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results. Sales of such products amounted to approximately 1,220 thousand units for the period.
Honda's automobile unit sales totaled 766 thousand units, a decrease of 20.4% from the same period last year. In Japan, unit sales amounted to 128 thousand units, the same level compared to the same period last year due mainly to favorable sales of Insight and FREED despite weak demand in the market. Unit sales outside of Japan decreased 23.5% to 638 thousand units from the corresponding period last year, due mainly to decreased unit sales in North America. Revenue from sales to external customers decreased 31.6% to JPY 1,523.4 billion (USD 15,867 million) from the same period in 2008, due mainly to decreased unit sales and the unfavorable currency translation effects. Honda reported operating loss of JPY 21.3 billion (USD 223 million), a decrease of JPY 171.7 billion from the same period last year, due primarily to decreased revenue, the increase in fixed costs as a result of reduced production and the unfavorable impact of currency effects, more than offsetting decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.
Revenue from customers in the financial services business increased 6.9% to JPY 155.9 billion (USD 1,624 million) from the same period in 2008, due mainly to an increase in operating lease revenues. Operating income increased 62.8% to JPY 46.8 billion (USD 488 million) from the same period in 2008, due primarily to the decreased allowance for losses on lease residual values and a decrease of funding cost.
Honda's power product unit sales totaled 1,158 thousand units, a decrease of 13.5% from the same period in 2008. In Japan, unit sales totaled 71 thousand units, a decrease of 55.3% from the same period last year. Unit sales outside of Japan totaled 1,087 thousand units, a decrease of 7.9% from the corresponding period last year, due primarily to a decline of unit sales in Europe. Revenue from sales to external customers in power product and other businesses decreased by 33.7% to JPY 66.5 billion (USD 693 million) from the same period last year, due mainly to decreased unit sales of power products and unfavorable currency translation effects. Honda reported operating loss of JPY 5.9 billion (USD 62 million), a decrease of JPY 6.1 billion from the same period in 2008. This was primarily due to decreased revenue, which more than offset decreased SG&A expenses.
Forecasts for the Fiscal Year Ending March 31, 2010
In regard to the forecasts of the financial results for the fiscal year ending March 31, 2010, Honda projects consolidated results to be as shown below:
The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 93 and JPY 129, respectively, for the first half of the year ending March 31, 2010, and JPY 91 and JPY 127, respectively, for the full year ending March 31, 2010.
Projected unit sales for the full year ending March 31, 2010 are shown below.
Unit Changes from FY2009
(thousands) (thousands)
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Motorcycle business 8,950 - 1,164
Automobile business 3,295 - 222
Power product and Other businesses 4,355 - 832
FY2010 Forecasts
First half ending September 30, 2009
Yen (billions) Changes from FY
2009
-------------- ---------------
Net sales and other operating revenue 3,920 - 31.2%
Operating income - 10 -
Income before income taxes and
equity in income of affiliates - 25 -
Net income attributable to
Honda Motor Co., Ltd. - 10 -
Yen
--------------
Basic net income attributable to
Honda Motor Co., Ltd. per common share - 5.51
Fiscal year ending March 31, 2010
Yen (billions) Changes from FY
2009
-------------- ---------------
Net sales and other operating revenue 8,280 - 17.3%
Operating income 70 - 63.1%
Income before income taxes and
equity in income of affiliates 45 - 72.2%
Net income attributable to
Honda Motor Co., Ltd. 55 - 59.9%
Yen
--------------
Basic net income attributable to
Honda Motor Co., Ltd. per common share 30.31
Note: Certain revisions for misclassifications have been made to the prior years' operating income, income before income taxes and equity in income of affiliates, net income attributable to Honda Motor Co., Ltd. and Basic net income attributable to Honda Motor Co., Ltd. per common share. Percentage changes are calculated based on the revised consolidated financial results of the prior years'.
Dividend per Share of Common Stock
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on July 29, 2009, resolved to make the quarterly dividend JPY 8 per share of common stock, the record date of which is June 30, 2009. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2010, is JPY 32 per share.
For additional information, please visit http://world.honda.com/investors/meeting/ where you can download 1Q financial results and presentation materials.