Honda tips sharp fall in net profit after quake

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Báo Đầu Tư English - 43 month(s) ago 3 readings

Honda tips sharp fall in net profit after quake

Japan's Honda said on Tuesday it expected net profit to tumble 64 per cent this fiscal year compared with last year, due to the impact of the March 11 earthquake and a strong yen.

It forecast net profit to plunge to 195 billion yen ($2.4 billion) from 534 billion. Operating profit was expected to dive 65 per cent to 200 billion yen from last year's 569.7 billion yen.

Honda said that as a result of the earthquake, profits would be hit by a loss in production, decreased sales and restoration costs, effects that were compounded by the rise of the yen against the dollar and euro as well as higher raw material costs.

Honda was forced to temporarily suspend production at its Japan sites as the disaster crippled crucial component supply chains amid a shortage of parts and power disruptions.

Rival automaker Toyota last week said it expected net profit in this fiscal year to drop 31 per cent on-year to $3.5 billion, also due to the impact of the quake and a strong yen.

The 9.0-magnitude earthquake and the resulting tsunami on March 11 destroyed entire towns, left 23,000 dead or missing and crippled electricity-generating facilities, including a nuclear plant at the centre of an ongoing emergency.

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