Honda raised its full-year profit outlook to 780 billion yen despite booking $3 billion in EV-linked costs during the second quarter. Operating profit fell 39% to 118 billion yen. Chief Financial Officer Masao Kawaguchi said, "We want to settle everything, as much as possible, within this financial year."
Sign up here.
Honda's additional writedown on the EV business comes after it booked more than $9 billion in charges in the previous financial year, which pushed Japan's second-largest automaker into its first annual loss in nearly 70 years.
The company had made considerable progress in talks with suppliers over settling the restructuring costs, Chief Financial Officer Masao Kawaguchi said.
"We want to settle everything, as much as possible, within this financial year," Kawaguchi said, adding that Honda wanted to resolve the issue as early as possible.
The total toll of more than $12 billion is among the biggest hits from an EV restructuring by any legacy automaker.
Honda kept its estimate for EV restructuring costs this financial year at 520 billion yen ($3.29 billion), including the 484.8 billion yen booked in the latest quarter.
The company raised its full-year operating profit forecast to 780 billion yen from 650 billion yen.
Operating profit for the July-to-September quarter fell 39% from a year earlier to 118 billion yen, well below the 250 billion yen median forecast in a poll of nine analysts by LSEG.
It is betting heavily on hybrid vehicles, particularly in the US, where sales rose 9% in the second quarter and accounted for half of its global retail sales of 823,000 vehicles.
LOWER GLOBAL SALES FORECAST
Honda also cut its full-year global vehicle sales forecast by 7% to 3.16 million, due mainly to falling sales in China.
It said it expected slightly tougher conditions in North America in the second half, partly due to higher interest rates and incentives.
On Monday, Honda said it would build a $3 billion auto plant in Ohio that will be able to produce 240,000 hybrid cars a year and start production in 2029.
($1 = 157.9700 yen)
Reporting by Daniel Leussink; Editing by Christian Schmollinger and Thomas Derpinghaus
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Daniel Leussink is a correspondent in Japan. Most recently, he has been covering Japan’s automotive industry, chronicling how some of the world's biggest automakers navigate a transition to electric vehicles and unprecedented supply chain disruptions. Since joining Reuters in 2018, Leussink has also covered Japan’s economy, the Tokyo 2020 Olympics, COVID-19 and the Bank of Japan’s ultra-easy monetary policy experiment.