Japan’s third-largest automaker Honda Motor yesterday said its net profit for the April-June quarter fell nearly 90 percent on the strong yen and the impact of the March disasters on production and sales.
However, it raised its forecasts for the full year from earlier estimates in reflection of a faster-than-expected recovery of parts supplies that were heavily disrupted by the March 11 earthquake and tsunami.
The maker of the Civic and Accord said net profit for the fiscal first quarter ended June 30 plunged 88.3 percent to ￥31.7 billion (US$394 million).
Net sales fell 27.4 percent to ￥1.7 trillion compared with the same period last year, while operating profit tumbled 90.4 percent on-year to ￥22.5 billion.
The slump was “mainly caused by the impact of the Great East Japan Earthquake ... and the unfavorable foreign currency translation effects,” Honda said in a statement.
Honda profits have been hit by a loss in production, decreased sales and restoration costs, effects that have been compounded by the rise of the yen against the US dollar and euro as well as higher raw material costs.
The unit is currently trading in the top end of the ￥77 to the US dollar range, near the postwar high of ￥76.25 that it struck in March.
However, Honda raised its net profit forecast to ￥230 billion this financial year from a June estimate of ￥195 billion, although the latest figure represented a 56.9 percent drop from the year-earlier profit.
Annual operating profit was expected to slide 52.6 percent on-year to ￥270 billion, better than a June forecast of ￥200 billion. Global sales are now expected fall 2.7 percent on-year to hit ￥8.7 trillion, from ￥8.3 trillion forecast in June.
Honda’s recovery from the March earthquake and tsunami has been slower than that of its peers, seeing June production decline 44.5 percent on-year compared with a 7.9 percent fall for Toyota and growth of 18.5 percent for Nissan.
The company is the second of Japan’s big-three automakers to report April-June quarter earnings, after Nissan said last week net profit in the period fell by 20.3 percent on-year to ￥85 billion.