Japan's Mitsubishi Motors Corp said yesterday it trimmed large losses in the first half to Septem-ber thanks to a weak yen and tough overhaul plan but earnings still suffered amid a global economic slump.
It said group net loss in the six months to September came to ?31.5 billion (US$262 million), a 58.3-percent improvement from last year when losses skidded to ?75.6 billion on extraordinary costs from a recall scandal and restructuring expenses.
"Under our turnaround plan we were able to cut fixed costs and material costs. Also we made foreign exchange profits in the six-month period," chief financial officer Junji Midorikawa told journalists.
Mitsubishi's interim pre-tax loss came to ?27.4 billion compared with a ?29.5-billion loss last year, on revenue of ?1,532.6 billion -- a 0.6 percent slide.
"We were able to offset weaker vehicle sales with the cost reduction measures and foreign exchange profit," Midorikawa said.
The dollar averaged ?120 over the six months compared with ?108 over the same period last year, boosting overseas earnings in yen-based terms and making products more competitive abroad.
In the six months, domestic sales fell 10.7 percent to 200,000 autos, while exports plunged 22.3 percent to 185,000 units.
"The world economy stopped growing overall during the first half of fiscal 2001 as the United States appeared to be entering a recession and with a slowdown in the Asian economies," the firm said in a statement.
But Mitsubishi, 37.3 percent owned by US-German counterpart DaimlerChrysler AG, said it was confident of meeting a goal to cut material costs by 15 percent in three years under a drastic turnaround plan announced in February aimed at driving the firm back into profits.
A streamlining plan to cut 9.500 jobs, or 14 percent of its total workforce, was also making good progress.
"[We have] already achieved a reduction of 6,400 persons as of October this year compared to April 2000 through the implementation of early retirement programs, natural attrition and other measures," Mitsubishi said.
The firm cut domestic production by 18 percent and pledged to boost around its flagging fortunes thanks to the launch of 16 new models worldwide in the next three years.
But for the immediate future Mitsubishi gave a conservative forecast, retaining a pledge to break even in the full year after suffering a record loss of ?278.1 billion in the full year to March this year.
Japan's number four automaker said net profit would be flat in the full year to March, while pre-tax profit would rise to ?10 billion from zero seen in May. But sales would slip to ?3,300 billion, from ?3,500 billion projected earlier.
Last year the firm was mired in scandal after confessing it had failed to inform authorities about at least 64,000 customer complaints over faulty vehicles since 1977, opting to repair the vehicles itself instead of issuing costly model-wide recalls.
But Mitsubishi said it hoped Japan was beginning to forget the incident.
"[The company] expects sales and profits in Japan to recover with a return of customer confidence and interest generated by improved quality," it said.
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