Honda’s annual profit collapsed by 42.4%

The net profit of Japanese automaker Honda Motor Co. decreased in the fiscal year ended 31 March 2019 by 42.4% to 610.3 billion yen. Operating profit decreased by 12.9% to 726.3 billion yen.irucka rose 3.4% to 15.89 trillion yen, the company said. Operating profit in the fourth financial quarter fell by 66.6% to 42.4 billion yen against 126.8 billion yen in the fourth quarter of the year before last, mainly due to costs associated with the optimization of production capacity in Europe, as well as unfavorable exchange rate differences.

The company’s net loss in the previous quarter was 13 billion yen compared to a net profit of 107.75 billion yen a year earlier.

Honda in February announced the reorganization of the global production network, which provides for the closure of a number of enterprises in Europe since 2021. In this regard, the company suffered a one-time loss of 68.09 billion yen.

Meanwhile, Honda’s revenue in the fourth quarter increased by 3.4% to 4,049 trillion yen due to growth in revenues from car sales (+ 3%) and financial services (+ 17%). The revenue of the division for the production of motorcycles decreased by 6%.

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According to Honda’s forecast, operating profit will increase by 6% to 770 billion yen in the current financial year, net profit – by 9% to 665 billion yen, revenue will decrease by 1.2% to 15.7 trillion yen.

The head of Honda Takahiro Hachigo said Wednesday that the company intends to reduce the range of models of cars by 2025, as well as to achieve full use of the world’s production capacity by 2022.

Honda shares fell by 2.8% in Tokyo on Wednesday, the company released reports after the market closed.