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Honda Quarterly Profit Jumps Fourfold to US$1.7 bn

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Honda Motor said Tuesday its net profit surged more than fourfold to US$1.7 billion for the three months to June, underscoring a recovery from the impact of last year’s quake-tsunami disasters.

The Japanese automaker posted a net profit of JPY 131.7 billion (US$1.7 billion) for the April-June quarter, up from JPY31.8 billion for the same period last year.

Sales soared 42.1 per cent to JPY2.44 trillion while operating profit jumped to JPY176.0 billion from JPY22.6 billion a year earlier, the company said.

The sales and profit gains were “due primarily to increased revenue in automobile business operations as production recovered from the effects of the Great East Japan Earthquake”, it said in a statement.

Honda left unchanged its full-year forecast, still projecting net profit at JPY470 billion on sales of JPY10.3 trillion for the fiscal year to March 2013.

“Strong sales of new models as well as a strong recovery from the supply chain disruption caused by the (natural disasters) contributed to a significant increase in profit in Japan and North America automobile operations,” the automaker said in a statement.

It added that a boost in its Asian car and motorcycle business also helped the bottom line despite a still-weak European market.

Japanese automakers saw extensive damage to their supply chains as a result of last year’s earthquake and tsunami in Japan and flooding in Thailand in the autumn.

A high yen also ate into exporters’ sales and profits.

Japanese automakers have come under pressure from the value of the currency, which last year hit record highs against the dollar and remains strong, making exports relatively more expensive overseas and cutting the value of repatriated earnings.

In April, Honda said its net profit for the fiscal year to March plunged 60.4 per cent to JPY211.5 billion while its full-year sales were down 11.1 per cent to JPY7.95 trillion.

Among Japan’s biggest carmakers including Toyota and Nissan, Honda was hardest hit and the slowest to recover from last year’s natural disasters.

But Honda’s results Tuesday were rosier than rival Nissan, which last week said its quarterly profit tumbled 15 per cent as strong yen and weak European market dented earnings.

But Nissan, Japan’s second-biggest automaker after Toyota, said its full-year forecast was on track.

In its fiscal first-quarter through June, Nissan said its net profit fell to JPY72.3 billion on sales of JPY2.14 trillion, up 2.6 per cent.

On Tuesday, smaller Japanese rival Mazda Motor reported a quarterly net loss of JPY6.46 billion, shrinking a year-earlier shortfall of JPY25.54 billion.

(Source: AFP)

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