Consolidated Financial Summary for the Fiscal First Half Ended September 30, 2006
-Achieved all-time record first half performance with increased sales and income in all business areas-
|TOKYO, Japan, October 25, 2006 – Honda Motor Co., Ltd. announced that in the first half of the current fiscal year, it realized a sixth consecutive all-time record for consolidated net sales and other operating revenue (herein referred to as “revenue”) due to increased sales revenue in all business areas. Operating income increased due to increased profit from higher revenues, and the positive effects from the depreciation of the Japanese Yen, despite the changes in the model mix, soaring raw materials costs exceeding continued cost reduction efforts and an increase in selling, general and administrative (SG&A) expenses. Honda realized an all-time record for first half results for operating income, income before income taxes, net income and equity in income of affiliates.
At the board of directors meeting held on October 25, 2006, Honda resolved to pay interim dividend of 30 yen, and to introduce quarterly dividend in the third quarter with the dividend date of record as December 31, 2006, to allow for more frequent payouts to its shareholders. The third quarter dividend is to be 17 yen per share. With a year-end dividend of 17 yen, the total dividend to be paid for the current fiscal year will be 64 yen per share.
♦ Results for Fiscal First Half ended Sept. 30, 2006
(Honda’s average rate for the current first half: JPY 115 = U.S. dollar 1, JPY 146 = Euro 1)
(Note) As of July 1, 2006, one share of the Company’s common stock was split into two, and EPS was calculated based on the issued shares after this 1:2 stock split.
Consolidated unit sales: All-time first half record unit sales were realized in the automobile and power product business areas. (The total includes fully finished products made by Honda and its subsidiaries as well as unit sales of fully finished products and parts for local production by affiliates accounted for under the equity method.)
Consolidated operating income totaled JPY 396.5 billion (+19.1%), the third consecutive increase for the fiscal first half. The increased profit from higher revenue, and a positive effects of the depreciation of the Japanese Yen, offset the negative impacts of changes in the model mix, soaring raw materials costs exceeding continued cost reduction efforts, and an increase in SG&A expenses.
Income before income taxes increased to JPY 345.8 billion (+10.3%), for the first increase in two years for the fiscal first half.
Equity in income of affiliates totaled JPY 57.6 billion (+22.1%), for a seventh consecutive increase for the fiscal first half, due primarily to increased income in automobile operations in China.
Consolidated net income was JPY 271.3 billion (+11.0%), for the sixth consecutive increase.
♦Results for Fiscal 2nd Quarter of the fiscal year ending March 31, 2007
Consolidated revenue for the fiscal second quarter totaled JPY 2,630.8 billion (+12.5%), a sixth consecutive all-time record. Consolidated operating income for the period was JPY 193.0 billion (+18.6%), consolidated income before income taxes was JPY 158.8 billion (-6.2%) due mainly to fluctuation in fair value of interest rate swap included in non-operating income and expenses, and consolidated net income totaled JPY 127.9 billion (-4.3%).
♦Forecast for Fiscal Year Ending March 31, 2007
Honda aims to achieve JPY 11 trillions of consolidated revenue for the fiscal year ending March 31, 2007, a seventh consecutive all-time record, based on the unit sales plans of 10.71 million motorcycles, 3.7 million automobiles and 6.255 million power products. (Of the unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or such subsidiaries are not included in unit sales, in conformity with U.S. generally accepted accounting principles as well as net sales and other operating revenue, which amounted to approximately 3.02 million units.)
Honda will carry out its business operations based on the goals described in the following chart with assumption of the average currency exchange rate of JPY 115 = U.S. dollar 1 (average rate for the first half of the fiscal year: JPY 115, second half of the fiscal year: JPY 115) and JPY 145 = Euro 1 (first half: JPY 146, second half: JPY 145 ).