Honda Motor Company this morning in Japan said that net profits would drop by $2.4 billion or ¥195 billion in the Japanese fiscal year that ends on 31 March from ¥534.1 billion a year earlier. This represents a 63.5% decline for Japan’s third largest automaker compared to the previous year, the result of production disruptions caused by the Japan earthquake and tsunami, rebuilding costs, as well as a strong Yen at an unprecedented ¥80:$1.
Thus, devastating financial destruction is following from a great human tragedy. Last week Japan’s largest automaker, Toyota, said profits would decline by 31% in the fiscal year. Number two Nissan has yet to issue a forecast after the earthquake.
Honda, the third largest in volume among Japanese automakers, said in a statement sales are projected to decline 7.1% to ¥8.3 trillion from ¥8.937 trillion, while operating profit is forecast to decline 65% to ¥200 billion from ¥569.78 billion. The total annual dividend to be paid for this fiscal year is expected to be ¥60 per share, an increase of ¥6 per share compared to the previous fiscal year.
The lack of parts from suppliers will trim Honda’s global sales by 6% to 3.3 million light vehicles this fiscal year. Global production will drop by 6% to 3.35 million vehicles.
(See also Toyota Predicts 31% Profit Dip in Fiscal Year from Earthquake and Japanese U.S. May Sales Plunge as Inventories Evaporate. Toyota, Nissan and Honda Decline in Earthquake Aftershocks and General Motors May Sales Flat in U.S. as Retail Sales Rise 9% and Ford May Sales Flat in U.S. as Retail Sales Rise 5% and Korean Automakers Post Huge U.S. Sales Gains as Disputed Free Trade Agreement Heads for Congressional Approval)