TOKYO - Honda’s fiscal fourth-quarter profit rose nearly 6 percent as the Japanese automaker’s recovery from floods in Thailand the previous year offset recent sales losses in China.
Honda Motor Co. reported Friday a quarterly profit of $765 million, up from $728 billion the same period the previous year. Quarterly sales jumped 14 percent to $27.7 billion.
The weak yen is more good news for Japanese exporters; it raises the value of overseas earnings and helps bring down product prices abroad. Such benefits are expected to grow over the coming months for all Japanese automakers.
The dollar has been approaching 100 yen levels, up by more than 20 percent from late last year.
For the fiscal year ended March 31, Honda - the maker of the Odyssey minivan, Acura sedan and Asimo robot - reported a $3.7 billion profit, up a solid 73.6 percent on the year.
It’s expecting to do even better this fiscal year, with a$5.8 billion profit.
Honda President Takanobu Ito categorized the foreign exchange shifts as corrections.
“The dollar trading at 78 yen and 80 yen was too extreme,” he told reporters on the sidelines of the recent Shanghai Auto Show.
A sore point for Honda and other Japanese firms is the territorial dispute with China that surfaced last year over tiny islands, setting off riots and boycotts. But sales have gradually been recovering.
Honda has been recording strong sales in the rest of Asia, jumping back from the sales drops caused by the floods in Thailand in 2011.
Japanese firms have also been recovering from supply disruptions caused by the March 2011 earthquake and tsunami that devastated their businesses.
Tokyo-based Honda expects to sell 4.43 million vehicles for the 2014 fiscal year. It sold 4 million vehicles for the fiscal year ended March 31.
It is also expecting to sell 17.4 million motorcycles around the world, up from 15.5 million.
Mazda Motor Corp. reported Friday it swung back into the black from deep losses the previous year.
The Hiroshima-based automaker had a $347 million profit for the fiscal year through March and is expecting a $707 million profit for the fiscal year through March 2014.
Japan’s top automaker, Toyota Motor Corp., reports earnings May 8, while Nissan Motor Co. is scheduled for May 10.
Honda said Friday it made wrong-way bets on the currency that cost the car maker $800 million last fiscal year.
The nonoperating expense occurred because of “fluctuations in foreign exchange currency rates,” the Tokyo- based car maker said in a statement. The losses involved bets on the yen’s exchange rate with the dollar and euro three months into the future, spokesman Tsuyoshi Hojo said, declining to elaborate on the specific contracts.
While a cheaper yen typically bolsters Japanese exporters’ profits by increasing the value of overseas sales, Honda’s shortfall highlights how some companies were caught off-guard by the sudden depreciation of the local currency. The yen has tumbled against all major currencies - including 19 percent against the dollar - since mid-November, when it became clear that Shinzo Abe would become prime minister.
Information for this article was contributed by Masatsugu Horie of Bloomberg News.
Business, Pages 27 on 04/27/2013