Honda Reports Financial Results for the Fiscal Year
20 May 1998
Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Fourth Quarter and the Fiscal Year Ended March 31, 1998
TOKYO, May 20 -- Honda Motor Co., Ltd. today
announced its consolidated financial results for the fiscal fourth quarter and
the year ended March 31, 1998.
Fourth Quarter Results
Honda's consolidated net income for the fiscal fourth quarter ended March
31, 1998 was 68.9 billion yen ($522 million), increasing 7.1% from the
corresponding three months last year. Net income per Common Share for the
quarter amounted to 70.74 yen ($0.54), and 70.72 yen ($0.54) on a fully
diluted basis, compared to 66.04 yen (66.03 yen on a fully diluted basis) for
the corresponding period a year ago. Each of Honda's American Shares
represents two Common Shares.
Consolidated net sales and other operating revenue for the quarter under
review amounted to 1,650.2 billion yen ($12,492 million), an increase of 11.4%
from the corresponding quarter a year ago. Strong gains in automobile sales,
in particular in North America and Europe, were the primary contributors to
this growth.
Consolidated operating income for the quarter totaled 105.7 billion yen
($801 million), decreasing 24.6% from the fourth quarter of the previous
fiscal year. This decrease in operating income was due primarily to lower
automobile sales in Japan and increased selling, general and administrative
expenses.
Consolidated income before income taxes for the quarter decreased 24.9%,
to 98.7 billion yen ($748 million).
The Company's consolidated net income for the quarter included a gain of
10.6 billion yen due to the enactment of an income tax rate change in Japan.
Reviewing the fourth quarter by business segment, Honda's motorcycle unit
sales decreased 24.1%, to 970,000 units due primarily to lower sales in Japan
and Southeast Asia. Revenue from Honda's motorcycle business, however,
increased 9.2%, to 210.4 billion yen ($1,593 million). This increase in
revenue was primarily due to higher sales in Europe and Latin America, and
improved model mix, together with the depreciation of the yen.
Unit sales of automobiles totaled 603,000 units and revenue amounted to
1,301.5 billion yen ($9,853 million) during the three-month period, increasing
4.0% and 10.7%, respectively. Automobile sales grew particularly in North
America and Europe. Favorable sales of the CR-V and the new Accord in the
United States were the major contributing factors to these increases.
Unit sales of power products increased 13.9% from the corresponding period
last year, totaling 1,162,000 units. Revenue from other businesses, including
the power product business, increased by 23.3%, amounting to 138.2 billion yen
($1,046 million). Honda's power product business during the quarter was
favorable. In particular, sales of general-purpose engines in North America
and Europe contributed to this advance. In addition, an increase in Honda's
financial services revenue strongly contributed to this increase.
Fiscal Year Results
Consolidated net income for the fiscal year ended March 31, 1998 was
260.6 billion yen ($1,973 million), increasing 17.8% from the corresponding
period last year. Net income per Common Share for the year amounted to
267.49 yen ($2.02), and 267.45 yen ($2.02) on a fully diluted basis, compared
to 227.00 yen (226.97 yen on a fully diluted basis) for the preceding year.
Each of Honda's American Shares represents two Common Shares.
Consolidated net sales and other operating revenue for the fiscal year
under review totaled 5,999.7 billion yen ($45,418 million), an increase of
13.3% from the corresponding period last year. This increase in revenue
resulted primarily from higher unit sales of automobiles in North America and
Europe. In addition, the depreciation of the yen positively affected revenue.
The yen averaged 122.77 yen to US$1 on the Tokyo foreign exchange market
during the fiscal year under review, 8.2% lower than the previous year.
Consolidated operating income for the year increased 15.2%, amounting to
462.3 billion yen ($3,500 million). In addition to higher sales, Honda's
ongoing cost reduction efforts and the positive impact of the depreciation of
the yen contributed to this increase.
Consolidated income before income taxes and net income for the fiscal year
ended March 31, 1998 amounted to 443.3 billion yen ($3,356 million) and 260.6
billion yen ($1,973 million), up 13.5% and 17.8%, respectively, from the last
year.
The Company's consolidated income statement data for the fiscal year ended
March 31, 1997 included a pre-tax gain of 10.4 billion yen and an after-tax
gain of 5.0 billion yen on the nonmonetary exchange of common shares of The
Bank of Tokyo, Ltd. ("BOT") held by Honda for common shares of The Bank of
Tokyo-Mitsubishi, Ltd.
The Company's consolidated net income for the fiscal year ended March 31,
1998 included a gain of 10.6 billion yen due to the enactment of an income tax
rate change in Japan.
Reviewing the fiscal year by business segment, motorcycle unit sales
decreased 1.9% from a year ago, totaling 5,101,000 units while revenue
increased 11.3%, amounting to 767.1 billion yen ($5,807 million). Motorcycle
sales in Europe and Latin America were favorable, partially offsetting
declines in sales in Japan and Asia. Improved model mix, together with the
depreciation of the yen, primarily contributed to the increase in revenue.
Honda's overall automobile unit sales totaled 2,343,000 units, 7.3% higher
than the previous year. The automobile business revenue for the fiscal year
increased 12.4%, totaling 4,752.4 billion yen ($35,976 million). Strong sales
in North America and Europe, notably the CR-V sports utility vehicle and the
Civic 4-door model in the United Sates, contributed to these increases.
Unit sales of power products totaled 3,013,000 units, an increase of 13.8%
over the previous year. Honda's other businesses including power products and
financial services registered a 28.1% increase in revenue, amounting to 480.1
billion yen ($3,634 million). Revenues generated from the Company's power
product business and financial services showed steady increases.
Forecast of Fiscal Year ending March, 1999
With reference to the Company's forecast for the fiscal year ending March
31, 1999, the Company is determined to continue to expand its sales, in
particular sales of automobiles in North America and Europe. Considering the
current business environment, management expects consolidated sales and other
operating revenue for the current fiscal year to amount to approximately 6,200
billion yen.
In addition to this expected increase in sales, the Company is planning to
continue with its efforts to reduce costs. Management expects consolidated
net income for the current fiscal year to total approximately 270 billion yen.
These forecasts are based on the assumption that exchange rate of the yen
against U.S. dollar for the current fiscal year will average at the 125 yen
level.
This announcement contains forward-looking statements within the meaning
of Section 21E of the U.S. Securities Exchange Act of 1934. Honda's actual
results could differ materially from those contained in these forward-looking
statements as a result of numerous factors outside of Honda's control,
including general economic conditions in Honda's principal markets and foreign
exchange rates between the Japanese yen and other major currencies, as well as
other factors detailed from time to time in Honda's reports filed with the
U.S. Securities and Exchange Commission.