Honda raised its net profit forecast for the current fiscal year thanks to cost cuts and a weaker yen

On Feb. 9, Honda announced its results for the third quarter (October-December) of fiscal year 2021 (April 1, 2021-March 31, 2022). Of this total, revenue was 3.69 trillion yen, compared with 3.77 trillion yen in the same period in 2020; operating profit fell 17 per cent year-on-year to 229 billion yen ($1.98 billion); and net profit was 193 billion yen, compared with $284.1 billion in the same period in 2020.

In the first three quarters of this fiscal year (April-December 2021), Honda's revenue was 10.7 trillion yen, up 11.8% from the same period last year; operating profit was 671.6 billion yen, up 50.3% from the same period last year; operating profit was 6.3%, up 1.6% from the same period last year; net profit was 582 billion yen, up 31.1% from the same period last year.

Honda raised its forecast for the current fiscal year, thanks to cost cuts and a weaker yen, despite continuing shortages in global chip supplies. Of this total, revenue was adjusted to 14.6 trillion yen; operating profit increased to 800 billion yen ($6.93 billion), up from 660 billion yen; operating margin increased to 5.5% from 4.5%; and net profit increased by 115 billion yen to 670 billion yen ($5.8 billion).

Like other carmakers, Honda has been forced to cut production plans because of chip shortages. Honda announced in early February that it would cut production at its Japanese plant by about 10 per cent, affected by the stagnation of supply of non-semiconductor components in south-east Asia caused by floods in Malaysia in December. Nonetheless, Honda has maintained its sales target of 4.2 million vehicles for the current fiscal year. Honda has sold 4.5 million cars in the past 12 months.

Last year, Honda announced that it would phase out internal combustion engine cars and that by 2040 it would only produce electric or fuel cell vehicles. To that end, Honda has cut its annual production of Japanese cars to more than 800000, down about 40 per cent from its 2002 peak.