Honda Reports Financial Results for the Fiscal q2
8 November 2000
Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Second Quarter and the First Half Ended September 30, 2000
TOKYO, Nov. 8 Honda Motor Co., Ltd. today
announced its consolidated financial results for the fiscal second quarter and
the first half ended September 30, 2000.
Second Quarter Results
Honda's consolidated net income for the fiscal second quarter ended
September 30, 2000 totaled Y58.1 billion ($538 million), a decrease of 8.5%
from the same period in 1999. Net income per Common Share, both on a basic and
fully diluted basis, for the quarter amounted to Y59.63 ($0.55), compared to
Y65.19 for the same period in 1999. Each of Honda's American Depositary Shares
represents two Common Shares.
Although unit sales in motorcycles and power products increased during the
fiscal second quarter, consolidated net sales and other operating revenue
(herein referred to as "revenue") for the quarter amounted to Y1,502.4 billion
($13,912 million), a decrease of 0.9% from the same period in 1999. This
decrease in revenue was primarily due to currency translation effects, which
had a negative impact on foreign currency-denominated revenue from Honda's
overseas subsidiaries translated into yen. Honda estimates that had the
exchange rate of yen remained unchanged from the same period in 1999, revenue
for the quarter would have increased by approximately 4.3%.
Consolidated operating income for the fiscal second quarter totaled Y97.1
billion ($899 million), a decrease of 7.1% compared to the same period in
1999. The negative impact of the appreciation of the yen together with
increase in research and development expenses were major factors for this
decrease, which undermined Honda's ongoing cost reduction efforts and the
decrease in selling, general and administrative expenses. Consolidated income
before income taxes for the quarter totaled Y90.2 billion ($836 million),
decreasing 14.3% from the same period in 1999.
With respect to Honda's sales in the fiscal second quarter by business
category, motorcycle unit sales increased 25.4% to 1,319,000 units, and
revenue increased 15.1%, to Y194.0 billion ($1,797 million). This increase in
unit sales was due primarily to higher sales in Asian countries out side of
Japan.
Honda's unit sales of automobiles decreased by 1.9% to 606,000 units, and
revenue decreased 3.6%, to Y1,207.8 billion ($11,183 million) during the
quarter. Unit sales of automobiles increased in Asia and Japan, however, lower
sales in Europe were the primary contributors to this decrease in unit sales.
Unit sales of power products totaled 794,000 units, an increase of 2.3%
compared to the same period in 1999. Strong sales of Honda's general-purpose
engines in Europe and Asia offset the decline in unit sales in North America.
Revenue from other businesses, including the power product business and
financial services, increased by 6.4% to Y100.5 billion ($931 million).
First Half-Year Results
Honda's consolidated net income for the first six months ended September
30, 2000 totaled Y121.9 billion ($1,129 million), a decrease of 10.6% from the
previous year. Net income per Common Share for the fiscal first half, both on
a basic and fully diluted basis, amounted to Y125.11 ($1.16), compared to
Y139.96 of the corresponding period a year ago.
Unit sales in all of Honda's business categories, namely motorcycles,
automobiles and power products, increased and consolidated net sales and other
operating revenue (herein referred to as "revenue") for the six months
amounted to Y3,051.9 billion ($28,259 million), an increase of 0.6% from last
year. Revenue included the effect of currency translation, and Honda estimates
that had the exchange rate of the yen remained unchanged from the previous
year, revenue for the year would have increased by approximately 8.4%.
Consolidated operating income for the fiscal first half totaled Y201.4
billion ($1,866 million), a decrease of 12.2% compared to the corresponding
period last year. Despite an increase in revenue and Honda's ongoing cost
reduction efforts, the negative impact of the appreciation of the yen was the
major factor for this decrease in operating income.
Consolidated income before income taxes for the fiscal first half totaled
Y192.0 billion ($1,778 million), a decrease of 15.2% compared to the previous
year.
With respect to Honda's sales for the six-month period by business
category, motorcycle unit sales increased 18.6% to 2,545,000 units, and
revenue increased 12.9% to Y391.8 billion ($3,629 million). Unit sales in
Asian countries such as India, Indonesia and Thailand, as well as in North
America increased during the period and offset the decline in unit sales in
Japan and Europe.
Honda's unit sales of automobile increased by 4.1% to 1,242,000 units,
while revenue decreased 1.0% to Y2,457.2 billion ($22,753 million) for the
six-month period. Strong sales of the Odyssey and the Vamos in Japan, higher
sales of the Acura TL, CL and the Odyssey in North America, together with
recovery of sales in Asian markets were the primary contributors to this
increase in unit sales.
Unit sales of power products totaled 1,823,000 units, representing an
increase of 3.1% compared to the previous year. Strong sales of Honda's
general-purpose engines in Europe and Asia offset the decline in unit sales in
North America. Honda's other businesses, including power products and
financial services, showed a 1.0% decrease in revenue, amounting to
Y202.7 billion ($1,877 million).
Forecasts for fiscal year ending March 31, 2001
In overseas markets, although the economies of Asian countries are
expected to continue to recover, Honda foresees consumer spending in the
United States to slow and European business conditions to remain severe due to
the ongoing depreciation of the euro. It will take some time for the economy
in Japan to recover and the business environment will remain severe, in view
of tougher sales competition.
In regards to the forecasts of the financial results for fiscal year
ending March 31, 2001, Honda projects the consolidated and unconsolidated
results as below:
Forecasts for consolidated results
In billions Changes from
of yen FY 2000
Net sales and other operating revenue Y6,220 +2.0%
Income before income taxes 360 -13.5%
Net income 220 -16.2%
Forecasts for unconsolidated results
In billions Changes from
of Yen FY 2000
Net sales Y2,950 +1.0%
Ordinary profit 120 -40.4%
Net income 88 -35.0%
These forecasts are based on the assumption that the exchange rates for
the yen to the U.S. dollar and the euro for the current fiscal year will
average Y106 and Y96, respectively.
Honda projects that the year-end cash dividend will be Y12.00 per share of
common stock. Total cash dividends for the term will be Y23.00.