Mitsubishi quarterly operating profit rebounds following scandal
TOKYO -- Mitsubishi Motor's operating profit surged nearly fivefold in the latest quarter, rebounding from a year earlier when earnings were broadsided by a fuel economy scandal.
Operating profit soared to 20.72 billion yen ($184.4 million) in the Japanese carmaker’s fiscal first quarter ended June 30, from 4.62 billion yen ($41.1 million) a year earlier.
Net income rebounded from a loss the year before, climbing to 22.97 billion yen ($204.5 million), from a loss of 129.72 billion yen ($1.15 billion) the previous April-June period, Mitsubishi CFO Koji Ikeya said Tuesday while announcing the Japanese carmaker’s earnings.
Results also improved over the previous year because profits were further depressed then by one-time outlays to cover the cost of recovery defective Takata airbags. Fresh savings from joint purchasing with the Renault-Nissan Alliance also helped bolster earnings.
Mitsubishi targets savings of 25.0 billion yen ($222.5 million) in the current fiscal year through closer coordination with its new partners. Mitsubishi admitted last year to cheating on fuel-economy ratings for several nameplates sold in Japan. The scandal torpedoed sales and opened the door for Nissan Motor Co. to take a controlling 34 percent stake in its smaller Japanese rival.
“As a full member of the Renault-Nissan Alliance, we continue to maximize synergies,” Ikeya said. About 90 percent of this year’s savings will come through joint purchasing, he added.
Other improvements will come through leveraging Nissan’s local sales finance subsidiaries in global markets such as Australia, Canada and New Zealand, where Mitsubishi was not previously able to offer its own in-house financing. It also launched a leasing service in Thailand.
Operating profit margin climbed to 4.7 percent in the fiscal first quarter, putting Mitsubishi on path to the sustainable 6 percent operating profit margin it targets in two years.
Rising sales helped drive the recovery, despite losses from negative foreign exchange rates.
Revenue increased 3 percent to 440.90 billion yen ($3.92 billion) in the fiscal first quarter.
Global retail sales climbed 9 percent to 241,000 vehicles.
North Asia delivered a 43 percent surge in sales volume, thanks to brisk business in China, where sales rose to 24,000 units, from 15,000 a year earlier.
But Sales slipped in North American and Europe. North America volume slid 5 percent to 36,000 units in the quarter, while European sales declined 2 percent to 46,000 units.
-- Naoto Okamura contributed to this article.