TOKYO — The maker of Subaru vehicles today reported surging profits in its latest quarter as the company chalked a third-straight year of record financial results on booming U.S. sales and big gains from favorable foreign currency rates.
Fuji Heavy Industries Ltd., as the company has been known since 1953, also said it will change its name to Subaru Corp. to improve brand recognition of its leading products.
It will adopt the corporate moniker Subaru, which is the Japanese name for the Pleiades star cluster, from April 1, 2017, pending approval at a June 28 annual shareholders meeting.
The move is meant to bolster branding at a company that makes everything from industrial products to helicopters but draws the vast majority of its cash from Subaru vehicles.
In announcing financial results for the company’s fiscal year ending March 31, President Yasuyuki Yoshinaga said operating income climbed 34 percent to 565.6 billion yen ($5.03 billion) for the full fiscal year. Net income surged 67 percent to 436.7 billion yen ($3.88 billion).
Fuji Heavy’s already impressive operating profit margin soared to 17.5 percent for the full fiscal year, compared to 14.7 percent in the previous year, the company said.
Revenue increased 12 percent to 3.23 trillion yen ($28.72 billion) in the 12 months ended March 31, driven by a 5.2 percent increase in worldwide sales to 957,900 vehicles.
The robust results marked another year of across-the-board records in operating profit, net income, revenue and sales for the niche maker of all-wheel drive vehicles.
N.A. growth offsets Japan, China
North America, which accounts for two-thirds of Subaru’s global sales, underpinned the expansion. Regional sales there grew 11 percent to 630,000 vehicles. Sales were flat in Europe at 48,000, while Subaru volume in Japan and China posted declines for the fiscal year.
Emboldened by the brisk sales, Subaru also lifted its mid-term global sales target for the fiscal year ending March 31, 2021. It now wants volume above 1.2 million units, compared with an earlier goal of 1.1 million. Subaru expects North America sales to exceed 800,000 by then.
Full-year results got a big boost from the weak yen and other foreign exchange tailwinds. Forex gains added 108.4 billion yen ($963.8 million) to the 12-month operating profit.
Q4 profit gains
In the company’s fiscal fourth quarter, operating profit rose 15 percent to 129.8 billion yen ($1.15 billion), while net income advanced 38 percent to 98.9 billion yen ($879.3 million).
The strengthening of the Japanese yen in the three months ended March 31 contributed to a 14.8 billion yen ($131.6 million) foreign currency exchange loss in the fiscal fourth quarter. But it wasn’t enough outweigh the gains made in the rest of the year when the yen was much weaker.
Revenue dipped 0.4 percent to 813.6 billion yen ($7.23 billion) in the January-March period, while global sales edged down 0.6 percent to 245,700 vehicles. Volume was hit by sliding sales in Japan, which offset at 5.7 percent increase to 128,900 vehicles in the United States.