Mazda Motor Corp. (7261.TO) and Mitsubishi Motors Corp. (7211.TO) Tuesday said they returned to profitability in the fiscal fourth quarter as extensive cost-cuts and solid Asian sales overpowered the strong yen.
Hoping to ride on the crest of this fortuitous state of affairs, the two auto makers added they plan to keep up this momentum this fiscal year with Mazda targeting its first annual net profit in three years and Mitsubishi aiming to more than triple its net profit.
For the January-March quarter, Mazda, in which U.S. counterpart Ford Motor Co. owns an 11% stake, posted a net profit of Y9.9 billion, reversing the Y100.4 billion net loss it posted in the same period a year earlier. The car maker also expects a net profit of Y5.00 billion for the full fiscal year, improving from the loss of Y6.48 billion that it suffered last fiscal year.
Demonstrating that it isn't reeling from the fact that capital-alliance talks with PSA Peugeot-Citroen recently broke down, Mitsubishi Motors posted a Y30.5 billion group net profit in the quarter ended March, sharply improving from the Y50.1 billion loss it registered a year earlier. The auto maker projects a net profit of Y15.00 billion this fiscal year, up from Y4.76 billion last fiscal year.
The upbeat projections from the pair, who are the first Japanese car makers to report fourth-quarter earnings, indicate the country's auto industry isn't just emerging from its worst period in recent times, it's aiming for sustainable growth by capitalizing on booming demand in emerging markets such as China.
Mazda expects sales in the U.S. and China to offset the yen's strength this fiscal year. Not to be outdone, Mitsubishi said sales in all regions including North America, Europe and Asia will grow and it will further reduce costs.
"The business environment remains severe given the yen's strength and high material prices. But we want to increase sales and profits by boosting sales volume and cutting costs," Osamu Masuko, president of Mitsubishi Motors, told a press conference.
Such encouraging earnings will likely be a sign of things to come with Honda Motor Co. releasing its results on Wednesday and Nissan Motor Co. reporting its latest earnings on May 12. Hit by large-scale recalls, Toyota Motor Corp. remains the wildcard in the bunch and it remains uncertain whether it will follow suit in reporting solid earnings when it announces its figures on May 11.
Mazda said its sales jumped 38% to Y616.0 billion in the three months ended March from Y448.0 billion, as vehicle sales in the booming Chinese market jumped 44% in the quarter while domestic vehicles sales jumped 30%. The car maker posted an operating profit of Y20.5 billion after suffering an operating loss of Y64.9 billion in the year prior.
For the current fiscal year through March, the maker of sports cars such as the MX-5 Miata convertible, expects sales to grow 4.9% to Y2.270 trillion. The car maker projects an operating profit of Y30 billion, more than triple the Y9.46 billion it racked up last fiscal year.
Also on Tuesday, the Hiroshima-based car maker outlined ambitious long-term goals, saying it aims to boost its operating profit to Y170 billion in the fiscal year through March 2016. The company seeks to lift global sales to 1.7 million vehicles by that year from the 1.19 million it sold in the last fiscal year and aims to reduce costs by Y120 billion by the targeted year from last fiscal year.
Mitsubishi Motors said its sales jumped 56% to Y493.5 billion in the three-month period from Y315.5 billion. The company logged an operating profit of Y33.7 billion, compared with an operating loss of Y16.0 billion a year earlier.
For this fiscal year, the maker of the Outlander and Pajero sports-utility vehicles expects sales to increase 31% to Y1.900 trillion and projects an operating profit of Y45 billion, more than tripling the Y13.92 billion it posted in the last fiscal year.
Hino Motors Ltd. (7205.TO) and Daihatsu Motor Co. (7262.TO), two domestic subsidiaries of Toyota who also reported their earnings on Tuesday, posted slightly more lukewarm results for last fiscal year.
Toyota's truck-making subsidiary Hino posted a net loss of Y3.01 billion in the last fiscal year, narrower than a loss of Y61.84 billion a year earlier, thanks to cost-cutting steps. Sales fell 4.3% to Y1.023 trillion from Y1.069 trillion due to sluggish sales of trucks and buses at home and abroad.
For this fiscal year, Hino expects to return to a net profit of Y10 billion and sales to grow 8.5% to Y810 billion.
Daihatsu, which focuses on making small cars, said its net profit declined 4.1% to Y21.16 billion in the last fiscal year from Y22.07 billion as its sales fell 3.5% to Y1.574 trillion from Y1.631 trillion due to sluggish domestic sales.
Daihatsu expects its net profit to fall 0.8% to Y21 billion and sales to drop 7.9% to Y1.450 trillion for the current fiscal year.
Mazda, Mitsubishi, Hino and Daihatsu report their earnings using Japanese accounting standards.