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Honda profit recovers from floods

in International Business

Honda profit recovers from floods

Japan’s Honda Motor has reported a 61% jump in first quarter profits, as car and motorcycle sales recovered from a year of disasters.

Net income for the January to March period was 71.5bn yen ($883m; £547m) up from 44.5bn yen for the same period a year earlier, the company said.

Japanese car makers suffered production disruptions after the tsunami in Japan and floods in Thailand in 2011.

The problems meant profits for the year to 31 March fell 60% to 211.4bn yen.

Records forecast

Analysts are expecting Honda’s rivals – Toyota and Nissan – to see a similar recovery in the first quarter of the year.

Honda, the third largest car maker in Japan, was widely regarded to have been the worst hit of all the Japanese car makers.

It was the last to get its supply chains back in order after the huge earthquake and tsunami in Japan in March 2011.

Its car plant in Thailand was only back in operation at the end of March 2012 – a six month disruption after the floods in October.

Finally, the strength of the yen has also worked against Honda and other Japanese exporters. A strong yen cuts into overseas earnings.

Friday’s earnings put an end to five financial quarters of drops in operating profits.

Honda attributed the recovery to improved sales in Japan and North America. It saw an 8.7% jump in sales to 2.41tn yen.

It is forecasting record global vehicle sales in the next financial year with a jump of almost 30%.

Source: BBC News



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