Honda net profit doubles to $1.56bn in Q3

January 31, 2014 - 10:24:27 am

TOKYO: Honda said Friday its net profit doubled to $1.56 billion in the three months to December, thanks to brisk global sales and a weaker yen.

Net profit for October-December rose to 160.7 billion yen or $1.56 billion, while revenue rose 24.5 percent to 3.02 trillion yen in the quarter.

The results were "mainly due to a rise in automobile and motorcycle net sales as well as the positive impact of foreign exchange effects," the company said.

A sharp decline in the yen this financial year has boosted profitability at major Japanese exporters including Honda rivals Toyota and Nissan.

For the nine months to December, Japan's third-largest automaker logged 403.60 billion yen in net profit, up nearly 40 percent from the same period the previous year.

Revenue for the three quarters rose 23 percent, with its sales in North America up 30 percent year-on-year thanks to healthy sales of four-wheeled vehicles, it said.

Honda also enjoyed good sales in the motorbike business in Asia, where net profit was up more than 50 percent from a year ago.

Recovery in North America's automobile sales was particularly tangible in the latest three months, with profit up 85 percent year on year, the company said.

"Like other Japanese carmakers, Honda has enjoyed the positive impact of a weak yen for the period. The forex impact is significant," Tatsuya Mizuno, auto analyst at Mizuno Credit Advisory, told AFP.

"But the weak yen trend appears uncertain now. It will be a major risk element if the trend reverses."

One negative factor that the Japanese economy is expecting is a consumption tax hike slated for April.

"The impact of the consumption tax hike on the industry is quite uncertain. The market is paying close attention to it," Mizuno said.

Japanese industry has benefited from the big-spending and easy-money policies of Prime Minister Shinzo Abe, with huge easing measures from the premier's hand-picked team at the Bank of Japan helping push down the currency.

The weaker yen boosts Japanese manufacturers' bottom line by making them more competitive overseas and inflating repatriated overseas profits.

In the nine months to December Honda's global motorbike sales rose 8.4 percent, while sales of other vehicles climbed 4.8 percent. (AFP)

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