Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Second Quarter Ended September 30, 2009
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TOKYO, Oct. 27, 2009 -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal second quarter and the fiscal half ended September 30, 2009.
Second Quarter Results
Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal second quarter ended September 30, 2009 totaled JPY 54.0 billion (USD 599 million), a decrease of 56.2% from the same period in 2008. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 29.78 (USD 0.33), a decrease of JPY 38.18 from JPY 67.96 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 2,056.6 billion (USD 22,799 million), a decrease of 27.2% from the same period in 2008, primarily due to decreased sales in the automobile business and unfavorable currency translation effects. Honda estimates that had the exchange rates unchanged from the corresponding period in 2008, revenue for the quarter would have decreased by approximately 16.1%.
Consolidated operating income for the quarter totaled JPY 65.5 billion (USD 727 million), a decrease of 56.0%, due primarily to decreased profit attributable to decreased sales, the impact of unfavorable currency effects caused by the appreciation of the Japanese yen and the increase in fixed costs per unit as a result of reduced production 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 66.1 billion (USD 733 million), a decrease of 55.7% from the same period in 2008.
Equity in income of affiliates amounted to JPY 22.3 billion (USD 248 million) for the quarter, a decrease of 18.1% from the corresponding period last year.
Financial Highlights
Yen (millions)
--------------
Three months Three months
ended ended
Sep. 30, Sep. 30,
2008 2009
Net sales and
other operating revenue 2,826,865 2,056,655
Operating income 148,851 65,543
Income before income taxes
and equity in income of
affiliates 149,462 66,140
Net income attributable to
Honda Motor Co., Ltd. 123,316 54,037
Yen
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Basic net income
attributable to
Honda Motor
Co., Ltd. per
common share 67.96 29.78
Business Segment
With respect to Honda's sales for the fiscal second quarter by business segment, motorcycle unit sales totaled 2,407 thousand units, a decrease of 16.8% from the same period last year. Unit sales in Japan totaled 52 thousand units, a decrease of 34.2% compared to the same period last year. Outside of Japan, total unit sales totaled 2,355 thousand units, a decrease of 16.3% from the same period in 2008*, due mainly to decreased unit sales in Indonesia and Other Regions including Brazil in South America, more than offsetting increased unit sales in India. Revenue from sales to external customers decreased 31.4%, to JPY 275.3 billion (USD 3,052 million) from the same period last year, due mainly to decreased unit sales and unfavorable currency translation effects. Operating income decreased 79.9% to JPY 9.3 billion (USD 103 million) from the same period last year, due primarily to decreased profit attributable to decreased sales and the impact of unfavorable 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 1,350 thousand units for the period.
Honda's automobile unit sales totaled 838 thousand units, a decrease of 10.4% from the same period last year. In Japan, unit sales amounted to 158 thousand units, an increase of 3.9% compared to the same period last year due mainly to favorable sales of Insight, Zest and Fit together with tax breaks and incentives on fuel-efficient green cars. Unit sales outside of Japan decreased 13.2% to 680 thousand units from the corresponding period last year, due mainly to decreased unit sales in North America, more than offsetting increased unit sales in Asia, especially in China and India. Revenue from sales to external customers decreased 28.1% to JPY 1,560.5 billion (USD 17,299 million) from the same period in 2008, due mainly to decreased unit sales and the unfavorable currency translation effects. Operating income decreased 82.7% to JPY 13.7 billion (USD 152 million) from the same period last year, due primarily to decreased profit attributable to decreased unit sales, the impact of unfavorable currency effects and the increase in fixed costs, more than offsetting decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.
Revenue from sales to external customers in the financial services business decreased 2.2% to JPY 155.0 billion (USD 1,719 million) from the same period in 2008, due mainly to the unfavorable currency translation effects, more than offsetting an increase in operating lease revenues. Operating income increased 94.0% to JPY 47.1 billion (USD 523 million) from the same period in 2008, due primarily to the decreased allowance for losses on lease residual values, a gain from lease assets and a decrease in funding costs.
Honda's power product unit sales totaled 932 thousand units, a decrease of 22.5% from the same period in 2008. In Japan, unit sales totaled 75 thousand units, a decrease of 48.6% from the same period last year. Unit sales outside of Japan totaled 857 thousand units, a decrease of 18.8% from the corresponding period last year due primarily to a decline in unit sales in all the regions. Revenue from sales to external customers in power product and other businesses decreased by 31.9% to JPY 65.7 billion (USD 729 million) from the same period last year, due mainly to decreased unit sales of power products and unfavorable currency translation effects. Honda reported an operating loss of JPY 4.6 billion (USD 52 million), primarily due to decreased profit attributable to decreased revenue, which more than offset decreased SG&A expenses.
*United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of 90.21 yen =U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on September 30, 2009.
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 85 and JPY 125, respectively, for the second half of the fiscal year ending March 31, 2010, and JPY 90 and JPY 129, respectively, for the full year ending March 31, 2010.
Projected unit sales for the full fiscal year ending March 31, 2010 are shown below.
Unit (thousands) Changes from FY2009
---------------- -------------------
(thousands)
-----------
Motorcycle business 9,565 - 549
Automobile business 3,400 - 117
Power product and Other businesses 4,455 - 732
FY2010 Forecasts for Consolidated Results
Fiscal year ending March 31, 2010
Yen (billions) Changes from FY
2009
-------------- ---------------
Net sales and other operating revenue 8,450 - 15.6%
Operating income 190 + 0.2%
Income before income taxes and equity
in income of affiliates 170 + 5.1%
Net income attributable to 155 + 13.1%
Honda Motor Co., Ltd.
Yen
---
Basic net income attributable to
Honda Motor Co., Ltd. per common 85.42
share
Dividend per Share of Common Stock
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on October 27, 2009, resolved to make the quarterly dividend JPY 8 per share of common stock, the record date of which is September 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 2Q financial results and presentation materials.