Mazda’s Q2 FY2013 profit performance exceeded the company’s forecasts, despite revenue being lower than estimated, helped by the success of the CX-5 model as well as by ongoing cost improvements.
However, the company has pared its revenue and operating income forecasts for the full fiscal year, ending 31 March 2013, but left ordinary and net income forecasts unchanged. The revenue forecast is now ¥2,170bn (US$27.2bn), compared with the previous estimate of ¥2,200bn, a 1.4% easing, while operating profit is now forecast at ¥25bn (margin of 1.2%), versus ¥30bn (1.4%) previously. The ¥25bn operating income forecast represents a ¥63.7bn improvement from the actual FY2012 result, driven by volume and mix (¥37.6bn), cost improvements (¥36.7bn) and other factors (¥6.3bn), only partially offset by the impact of the appreciation of the yen (¥9.9bn, of which ¥9.5bn against the euro), and higher marketing expenses (¥7.0bn). The ordinary and net income forecasts remain at ¥15bn and ¥10bn, respectively.
The company noted it has changed the revenue and operating income forecasts mainly due to the decrease in the sales volume in China. Global retail sales volume in FY2013 is now estimated at 1,255,000, a decrease of 85,000 from the previous forecast. China sales are now estimated at 170,000, down from the previous estimate of 255,000. In an update on the status of the company’s business in China, Mazda has reported that dealers have been conducting business “as usual” since October but that “recovery in showroom traffic and orders has been slow.” Operations at the company’s Nanjing plant have been reduced to one shift from the second half of October. The future aim is to split the joint venture and to “establish a new company at the earliest timing.”
The exchange rate assumptions underlying forecasts are now ¥80:US$ and ¥100:€ (previously ¥105).
Despite the easing of forecasts, the predicted FY2013 results remain significantly improved from the actual disaster-hit FY2012 performance, when the company experienced losses at all levels (operating ¥38.7bn, ordinary ¥36.8bn and net ¥107.7bn) on revenue of ¥2,033.1bn.
Mazda’s retail sales in Q2 FY2013 totalled 313,000, taking the half-year (H1 FY2013) total to 613,000, 9,000 ahead of the H1 FY2012 total but 57,000 short of the company’s forecast made in April, the major driver of the fall being 32,000 less sales than expected in China. Q2 FY2013 revenue was ¥516.9bn, down from ¥551.1bn in Q2 FY2012, the 6% fall being driven by volume and mix (-5%) and exchange rate factors (-1%). The Q2 result took the H1 total to ¥1,023.5bn, ¥64.3bn or 6.7% up from the H1 FY2012 total of ¥959.2bn, but 1.6% below the forecast total of ¥1,040bn.
Q2 FY2013 operating profit was ¥9.7bn (margin of 1.9%), versus just ¥1.5bn (0.3%) in the same quarter of the previous year, the ¥8.2bn improvement being driven by cost improvements (¥7.8bn), lower marketing expenses (¥1.4bn) and other factors (¥2.9bn). These were only partially offset by adverse volume and mix factors (¥0.7bn) and exchange rate changes (¥3.2bn). The H1 FY2013 operating income total was ¥11.5bn (margin of 1.1%), compared with the loss of ¥21.6bn seen in the July-September 2011 quarter.
Ordinary and net profit in the latest quarter was ¥9.3bn and ¥12.2bn, respectively, taking the half-year totals to ¥441m and ¥5.7bn (forecasts of a ¥2bn loss and profit of ¥5bn).
