Honda Reports Unaudited Consolidated Financial Results for Q2
9 November 1999
Honda Motor Co., Ltd. Reports Unaudited Consolidated Financial Results for The Fiscal Second Quarter and the First Half Ended September 30, 1999
TOKYO, Nov. 9 -- Honda Motor Co., Ltd. today
announced its unaudited consolidated financial results for the fiscal second
quarter and the first half ended September 30, 1999.
Second Quarter Results ended September 30, 1999
Honda's consolidated net income for the fiscal second quarter ended
September 30, 1999 was Y63.5 billion ($594 million), decreasing 20.7% from the
corresponding three months last year. Net income per Common Share, both on a
basic and fully diluted basis, for the quarter amounted to Y65.19 ($0.61),
compared to Y82.16 of the corresponding period a year ago. Each of Honda's
American Depositary Shares represents two Common Shares.
Consolidated net sales and other operating revenue for the quarter
amounted to Y1,516.2 billion ($14,177 million), a decrease of 1.4% from the
corresponding quarter a year ago. Even though unit sales of automobiles and
power products increased, lower sales of motorcycles and the appreciation of
the yen significantly affected revenue.
Consolidated operating income for the quarter totaled Y104.5 billion
($978 million), decreasing 32.0% from the second quarter of the previous
fiscal year. The negative impact of the appreciation of the yen was the major
factor for this decrease in the operating income.
Consolidated income before income taxes for the quarter decreased 26.7%,
to Y105.3 billion ($985 million).
Reviewing Honda's sales in the second quarter by business segment, Honda's
motorcycle unit sales decreased 9.0% to 986,000 units, and revenue decreased
24.2%, amounting to Y134.5 billion ($1,258 million). This decline in unit
sales was due primarily to lower sales in Asia, particularly in China and
India.
Unit sales of automobiles totaled 618,000 units, an increase of 13.4%, and
revenue increased 2.5% to Y1,253.2 billion ($11,718 million) during the three-
month period. This increase in unit sales was primarily due to strong sales
of the Odyssey minivan in North America, and minivehicles such as Life and the
newly introduced Vamos in Japan. Unit sales of power products in every region
in the world showed a steady growth, totaling 842,000 units, an increase of
11.7% from the corresponding period last year. Favorable sales of power
products, in particular sales of generators in North America, contributed to
this increase in unit sales. Revenue from other businesses, including the
power product business and financial services, decreased 6.9%, amounting to
Y128.4 billion ($1,201 million).
First Half-Year Results
Consolidated net income for the first six months ended September 30, 1999
totaled Y136.3 billion ($1,275 million), a 13.8% decrease from the fiscal
first half last year. Net income per Common Share, both on a basic and fully
diluted basis, for the fiscal first half amounted to Y139.96 ($1.31), compared
to Y162.44 of the corresponding period a year ago.
Consolidated net sales and other operating revenue for the six months
totaled Y3,032.9 billion ($28,358 million), a decrease of 3.2% from the fiscal
first half last year. Even though unit sales of automobiles and power
products increased, lower sales of motorcycles and the appreciation of the yen
negatively affected revenue.
Consolidated operating income for the fiscal first half decreased 22.8%,
amounting to Y229.5 billion ($2,146 million), primarily due to the substantial
appreciation of the yen.
Consolidated income before income taxes for the fiscal first half amounted
to Y226.4 billion ($2,117 million), down 19.6% from the corresponding period
last year.
Reviewing the six-month period by business segment, Honda's motorcycle
unit sales totaled 2,033,000 units and revenue amounted to Y285.8 billion
($2,673 million), decreasing 1.9% and 23.1%, respectively, from a year ago.
Even though unit sales in Asian countries outside Japan grew during the
period, primarily due to increased sales of component parts to India, declined
sales in Japan, Europe and Latin America affected Honda's motorcycle unit
sales.
Honda's overall automobile unit sales totaled 1,193,000 units, 6.9% higher
than the corresponding period last year, while revenue decreased 0.5% to
Y2,480.9 billion ($23,197 million) for the fiscal first half. Favorable sales
of automobiles, in particular the Odyssey minivan and the Acura TL near-luxury
sedan in North America, as well as minivehicles such as Life and Vamos in
Japan were the primary contributors to this increase in unit sales.
Unit sales of power products totaled 1,882,000 units, an increase of 16.3%
over the corresponding period last year. Strong sales of general-purpose
engines and generators in the United States were the major contributors to
this increase in unit sales. Honda's other businesses including power
products and financial services registered a 0.6% decrease in revenue,
amounting to Y266.0 billion ($2,488 million).
Forecast for fiscal year ending March 31, 2000
In overseas markets, despite gradual economic recoveries in the Asian
countries, future business environment of Honda will be generally severe
primarily due to unclear directions of the U.S. and European economies. In
addition, in Japan, a quick recovery of demands is unlikely and Honda
anticipates that the appreciation of the yen will hold. In short, business
environment will remain severe in foreseeable future. In regards to the
forecasts of the financial results for fiscal year ending March 31, 2000,
Honda projects the consolidated and unconsolidated results as below.
Forecasts for consolidated results
In billions of Yen Change from FY 1999
Net sales and other operating revenue Y6,100 -2.1%
Income before income taxes 410 -21.2%
Net income 250 -18.0%
Forecasts for unconsolidated results
In billions of Yen Change from FY 1999
Net sales Y2,900 -2.1%
Ordinary profit 215 -17.2%
Net income 141 +3.7%
Honda projects that the year-end cash dividend will be Y12.00 per share of
common stock, an increase of Y2.00. Total cash dividends for the term will be
Y23.00, an increase of Y3.00. Taking into the account of company's earnings
performance, in the long-term viewpoint, Honda is trying to realize relevant
return levels to the shareholders.
These forecasts are based on the assumption that the exchange rates of the
yen to the U.S. dollar and Euro for the current fiscal year will average Y111
and Y117, respectively.
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 materially differ from those contained in these forward-looking
statements as a result of numerous factors outside of Honda's control. Such
features include 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.