Honda profit tumbles amid disasters, strong yen
Japan’s third-biggest automaker Honda on Monday said net profit for
the fiscal first half plunged 77.4 percent year-on-year, as it grapples
with the impact of the March earthquake and a strong yen.
The automaker also held off giving an earnings forecast for the year
ending March 2012 as it continued to assess the impact on its operations
of Thailand’s worst flooding in decades, which has forced it to halt
production there.
Analysts say the efforts of Japan’s automakers to restore production
in the wake of the March earthquake and tsunami, which damaged
facilities and crippled supply chains, face being undermined by the
impact of the Thai disaster.
The maker of the Civic and Accord said vehicle shortages due to
quake-related production problems pushed down sales in the United States
and Japan.
Honda said its net income in the first half ended September 30
totalled 92.2 billion yen ($1.17 billion), a decrease of 77.4 percent
from the same time a year ago. Operating profit in the period plunged
81.1 percent to 75 billion yen, it said, due to lower sales and
production, the impact of raw material price increases and the effects
of a stronger yen.
Revenue fell 22 percent to 3.6 trillion yen on lower automobile sales
“led by decreased production attributable to the impact of the
earthquake and unfavourable foreign currency translation effects,” the
automaker said.
A strong yen makes it harder for domestically made vehicles to be
competitive overseas, while Japanese automakers’ overseas earnings are
eroded when repatriated.
Japan on Monday intervened in currency markets to weaken the unit
after it touched a fresh record high against the US dollar, amid
concerns that its strength could undermine the nation’s fragile economic
recovery.
Meanwhile net profit in the second quarter ended September 30 fell
55.5 percent on-year to 60.4 billion yen.
TOKYO, Oct 31, 2011 (AFP) |