Honda annual net profit jumps 44pc despite Covid-19 pandemic

A visitor and the logo of Honda Motor Co are reflected on a Honda car at the company’s headquarters in Tokyo January 30, 2009. — Reuters pic
A visitor and the logo of Honda Motor Co are reflected on a Honda car at the company’s headquarters in Tokyo January 30, 2009. — Reuters pic

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TOKYO, May 14 — Honda said today that its full-year net profit soared more than 40 per cent thanks to cost-cutting efforts, shrugging off the negative impact of the pandemic.

But the company now forecasts a drop in net profit for the year ahead and a stagnation in its operating profit, citing a global chip shortage and the rising costs of materials.

The Japanese automaker posted net profit of ¥657.4 billion (RM24.7 billion) for the year to March, up 44.3 per cent, beating its own annual forecast of ¥465 billion.

Operating profit grew 4.2 per cent to ¥660.2 billion “due primarily to control of selling, general and administrative expenses and cost reduction efforts,” it said in a statement.

The company added there were “some unfavourable factors such as a decrease in demand due to the impact of the Covid-19 pandemic and the impact of semiconductor supply shortages.”

It forecasts consolidated operating profit for the current fiscal year that started in March of ¥660 billion, with net profit at ¥590 billion.

The results come after the car giant said last month it would aim to have electric and fuel cell vehicles account for 100 per cent of all sales by 2040 to promote climate goals.

Its rival Toyota, the world’s top-selling automaker, generated ¥2.25 trillion annual net profit.

The pandemic has taken a heavy toll on the global auto sector but demand recovered swiftly in the second half of last year, most notably in the United States and China, they said.

Crisis-hit Nissan in the meanwhile narrowed its net loss to ¥448.7 billion, from a loss of ¥671.2 billion a year earlier.

A shortage in semiconductors used in modern vehicles has weighed heavily on the global auto industry. — AFP

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