Honda raised its full-year forecasts on Wednesday and posted its first quarterly profit rise in six quarters, boosted by a weaker yen and the absence of US tariff-related costs that weighed on earnings a year earlier.
Japan’s second-biggest carmaker lifted its full-year operating profit forecast by 30% to ¥650bn (R67.28bn) from ¥500bn (R51.99bn), citing a revised exchange-rate assumption. It also raised its net profit and revenue outlooks.
Operating profit more than doubled to ¥530.8bn (R55.19bn) in the April to June quarter from ¥244.2bn (R25.39bn) a year earlier, well above the ¥302.1bn (R31.41bn) median estimate in an LSEG poll of nine analysts.
Honda assumed the yen will trade at an average rate of 155 per dollar this fiscal year, compared to 145 expected previously.
Honda coming off the back of first yearly loss in decades
The results come after the struggling automaker posted its first annual loss in nearly 70 years in May, hit by more than $9bn (R147.66bn) in costs to restructure its electric-vehicle business.
Honda said it did not book any restructuring-related charges in the first quarter, adding that negotiations with suppliers affected by the overhaul, many of them in North America, continued.
It said it expected to face extra restructuring costs of ¥520bn (R54.07bn) this business year, up from ¥500bn (R51.98bn) forecast previously.
High fuel prices driving consumers to electric models
CEO Toshihiro Mibe apologised for Honda’s performance at the company’s annual shareholder meeting in June, but won backing for his reappointment to the board.
The company had already reported that global automotive sales fell 4% to 838,000 cars in the first quarter.
Worldwide sales were dragged down by a near 50% slump in China and declines elsewhere in Asia as more consumers opted for EVs due to high fuel prices, offsetting gains in the US and Japan. The US made up about half of Honda’s vehicle sales during the quarter.
Honda CFO Masao Kawaguchi told reporters that rising fuel prices in North America were increasing demand for its fuel-efficient hybrids and petrol-powered models.
Reuters
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