Honda, Mazda Take Hit on Profits from Japan Quake

Honda's profits fell 38.3% while Mazda posted a loss of $763 million.

Honda said net profit for the fourth quarter ended March fell 38.3% from a year earlier, due to costs related to the quake as well as the impact of a strong yen. The maker of the popular Civic and Accord models said net profit for the quarter totaled 44.5 billion yen (US$536 million), but warned the picture would deteriorate.

"We envision the second quarter being grimmer than the current quarter because even if production levels begin to pick up in Japan by then, there will still be a lag effect at our overseas factories," said Fumihiko Ike, a senior managing officer and director.

Honda was forced to temporarily suspend production at its Japan sites as the disaster crippled crucial component supply chains amid a shortage of parts.

Earlier this week Honda said output plunged 62.9% year on year in March while worldwide total production was down 19.2% at 282,254 units.

On April 18, the automaker said quake-related losses totaled about 45.7 billion yen.

Honda said sales fell 2.9% to 2.213 trillion yen from 2.280 trillion in the quarter ended March, due mainly to a surging yen, and operating profit sank 52% to 46.2 billion from 96.10 billion.

Net profit doubled year-on-year in 2010-11 to 534.1 billion yen but the automaker gave no forecast for the current year as it continues to gauge the impact of the disasters on production.

"Production at Hondas automobile plants both in and outside of Japan has been reduced," Honda said. "Honda's production activities may be affected depending on the status of parts supplies, and on the status of infrastructure, such as the supply of electricity and logistics services."

Mazda Motor posted a net loss in the fiscal fourth quarter, blaming the strength of the yen, slow sales and the March 11 disaster. Japan's fifth-largest car maker by volume posted a net loss of 62.8 billion yen (US$763 million) in the three months ended March 31, compared with a net profit of 9.9 billion yen in the same quarter last year.

The company, which has seen former top shareholder Ford sell the bulk of its stake, said its net loss for the 12 months ended March expanded to 60.0 billion yen from 6.48 billion a year earlier.

It said it was unable to give a full year forecast.

"Affected by the major earthquake in northeast Japan, which occurred on March 11, 2011, production activity is expected to decline and a mood of self-restraint in consumer sentiment has become prevalent," Mazda said. "The outlook is very uncertain."

The woes of Japan's automakers are in stark contrast to overseas rivals. South Korea's Hyundai posted a 47% rise on April 27 in first quarter net profit on higher prices and strong demand.

Copyright Agence France-Presse, 2011

See Also
Honda to Halve British Output After Japan Quake
Honda's 3Q Profit Plunge
Toyota, Honda Extend Plant Shutdowns

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