Honda guides to profit decline this year as sales stall

10th May 2024 12:31

(Sharecast News) - Japanese carmaker Honda said that annual profits are expected to fall after a huge jump in the year just gone, with currency movements and rising costs estimated to weigh on the bottom line.

The news came as the company unveiled a share buyback of up to 300bn yen (£1.5bn).

Honda said that pre-tax profit for the year to 31 March 2025 is expected to be JPY1.5trn (£7.7bn), with currency movements having a JPY201bn negative impact and R&D expenses being JPY121bn higher than last year.

However, the company is now targeting a 2.8% increase in operating profit to JPY1.42trn, up from earlier guidance of JPY1.25trn.

Sales revenues meanwhile are expected to fall 0.6% to JPY20.3trn (£104bn), with just a 0.3% increase in projected car sales to 4.12m units.

In the year to 31 March 2024, sales revenues jumped 20.8% to JPY20.4trn, helped by increased sales in the Automobile business as well as positive FX translation effects.

Pre-tax profit surged 87% to JPY1.64trn after its car business swung to a profit helped by a decent performance in the US.