Honda full-year net profit surges 56pc to $5.6bn

April 25, 2014 - 11:05:16 am

TOKYO: Japanese automaker Honda said Friday its net profit soared to $5.6 billion in the fiscal year to March, thanks to brisk overseas sales and a weaker yen.

Earnings for the period came in at 574 billion yen, up 56.4 percent from a year earlier, while revenue rose about 20 percent to 11.84 trillion yen.

The company forecast a profit of 595 billion yen for the current year to March 2015.

Results for the January-March quarter were especially strong, with net profit more than doubling to 170.5 billion yen from a year earlier, Honda said.

Japan's third-largest car maker also said its annual operating profit rose nearly 40 percent from the previous year.

"Due primarily to increased revenue in automobile and motorcycle business operations as well as favourable foreign currency translation effects".

A sharp decline in the yen has boosted profits at major Japanese exporters.

Including Honda rivals Toyota and Nissan which are to report their full-year earnings next month.

Toyota, the world's largest automaker, has tipped a record annual profit after more than doubling its nine-month earnings to $15 billion thanks to the yen's sharp decline and surging sedan sales.

Nissan, Japan's number two automaker, said earlier that its nine-month net profit jumped 18 percent to about $2.68 billion.

Japanese industry benefited from the big-spending and easy-money policies of Prime Minister Shinzo Abe, with huge monetary 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 lines by making them more competitive overseas and inflating repatriated overseas profits.

Automakers have also benefited as sales recover in China.

They slumped in late 2012 and into last year as a Tokyo-Beijing diplomatic row sparked a consumer boycott of Japanese brands in the world's biggest vehicle market.

Diplomatic relations remain tense, but Japanese manufacturers have reported sales are returning to pre-dispute levels.

Despite the improvements, analysts have warned that gains from the weak yen will taper off. Political unrest in Thailand, a major production base for Japanese automakers, could also hit results.

Honda's global motorcycle sales rose 10.4 percent in North America over the year and 11.4 percent in Asia, it said.

In the automobile business, the maker of Fit hybrids and Vezel compact sport-utility vehicles sold 18 percent more vehicles in Japan, thanks to the popularity of fuel-efficient small cars. (AFP)