Mazda quarterly operating profit plunges 56%
TOKYO -- Mazda Motor Corp.’s operating profit tumbled 56 percent in the latest quarter, as a deteriorating sales mix, foreign exchange rate losses and recall costs undermined results.
Operating profit fell to 23.7 billion yen ($213 million) in the Japanese carmaker’s fiscal fourth quarter ended March 31, from 53.4 billion yen ($480 million) a year earlier.
Net income, however, advanced 26 percent to 13.9 billion yen ($124.9 million) in the three months, the company said Friday while announcing full fiscal year financial results.
That increase was from a low base the year before when net income was artificially depressed by recall costs associated with replacing faulty Tataka airbag inflators, Mazda said.
Revenue inched ahead just 1 percent to 865.8 billion yen ($7.78 billion), as global retail sales advanced 1 percent to 397,000 vehicles in the fiscal fourth quarter.
Mazda’s operating profit was by foreign exchange losses, as the the Japanese yen appreciated in value against other currencies. Worsening wholesale volume and mix lopped off a bigger slice, trimming 9.1 billion yen ($81.8 million) from quarterly earnings.
Outlays for quality issues were part of another 23.9 billion yen ($214.8 million) hit. The recalls included a callback of diesel vehicles in Japan and a global campaign to fix a car seat problem.
Retail volume in North America, Mazda’s biggest market, increased 5 percent to 98,000 units in the fourth quarter. Sales in Japan climbed 2 percent to 71,000 vehicles, while sales in China surged 10 percent to 65,000. Volume in Europe declined 3 percent to 71,000.
Mazda’s North American operating profit dropped 44 percent to 1.9 billion yen ($17.1 million) in the fiscal fourth quarter, from 3.4 billion yen ($30.6 million) operating profit the year before.
Europe operating profit increased 4 percent to 2.1 billion yen ($18.9 million) in the period.
Fiscal year results
For the full fiscal year ended March 31, global operating profit declined 45 percent to 125.7 billion yen ($1.13 billion). Net income fell 30 percent to 93.8 yen ($843.1 million).
Results were hit by 102.7 billion yen ($923.1 million) in foreign exchange losses.
Revenue retreated 6 percent to 3.21 trillion yen ($28.85 billion) in the 12-month period, as global retail sales grew 2 percent to 1.56 million vehicles.
Looking ahead to the current fiscal year ending March 31, 2018, Mazda expects rising sales and moderating foreign exchange rates to drive increases in operating profit and net income.
In announcing its full-year outlook, Mazda predicted that global operating income will increase 19 percent to 150.0 billion yen ($1.35 billion), in the current 12-month period.
Net income is forecast to rise 7 percent to 100.0 billion yen ($898.8 million) for the fiscal year.
Revenue is seen expanding 4 percent to 3.35 trillion yen ($30.11 billion), as global sales advance 3 percent to 1.6 million vehicles. Sales in North America are expected to increase 6 percent to 454,000 vehicles, while Europe is seen growing 2 percent to 267,000 vehicles.
Naoto Okamura contributed to this article.