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Honda yearly earnings solid despite chip crunch

Honda expects net profit to remain steady in the current financial year. ©AFP

Tokyo (AFP) - Japanese auto giant Honda said Friday net profit rose 7.6 percent in the financial year to March, benefiting from strong motorbike sales and a weaker yen.

The company also expects net profit to remain steady in the current financial year, even as the global microchip shortage and virus-related supply chain disruption cause headaches for the car industry.

Honda said annual net profit rose 7.6 percent to 707 billion yen ($5.5 billion) in 2021-22 and issued a forecast of 710 billion yen net profit for the year to March 2023.

Sales last year were up 10.5 percent, it said, "due mainly to increased sales revenue in motorcycle business and financial services business operations as well as positive foreign currency translation effects."

But "despite shifting to a recovery trend, the economic environment surrounding the company, its consolidated subsidiaries and its affiliates...continued to be difficult due to the impact of (the) semiconductor supply shortage, and increases in raw material costs, among other factors."

Honda said its factories in Japan and overseas had been forced to suspend or reduce output due to supply chain and staffing issues related to Covid-19.

Toyota, the world's top-selling carmaker, this week also posted a record full-year net profit, helped by strong sales and a cheaper yen.

The currency has touched 20-year lows against the dollar in recent weeks, inflating the value of Japanese automakers' overseas profits. Some analysts believe this will help them offset their current challenges.

In April, Honda said it will invest nearly $40 billion into electric vehicle technology over the next decade as it works towards switching all sales away from traditional fuel cars.

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Dive Deeper:
Japan's Honda sees profit slide on chips, material cost woes
Honda’s fiscal fourth quarter profit slipped to almost half of what the Japanese automaker earned the year before as it…
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Nissan reports first full-year net profit in three years
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Japan's Nissan returns to profit despite chips shortages
Japanese automaker Nissan has returned to profitability for the first time in three fiscal years, despite challenges such as supply…
One subscription that gives you access to news from hundreds of sites
Toyota's quarterly profit down on COVID parts crunch
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San Francisco (AFP) - Saudi Aramco on Wednesday dethroned Apple as the world's most valuable company as surging oil prices…
Get all your news in one place