Honda's CFO announced fiscal Q6 results and FYE March 31, 2027 forecast, expressing condolences for Kumamoto earthquake victims.

Following the 2026 Kumamoto earthquake, affected production sites faced suspensions and parts shortages. Despite these challenges, swift recovery efforts led to partial resumption of operations, with a focus on achieving full-scale production. The fiscal quarter ending March 31, 2027, saw record high operating profits, particularly in the motorcycle business, driven by strong global sales. The automobile business, while struggling in China, saw steady increases in North America. For the fiscal year ending March 2027, operating profits were revised upward, reflecting business resilience and careful risk assessment amidst uncertainties.

The company revises its forecast, projecting a ¥1.17 trillion adjusted operating profit, up ¥170 billion, excluding Eev-related losses, under unchanged assumptions. It maintains a strong financial position with a net cash of ¥300 trillion, supporting a stable annual dividend policy aimed at sustainable shareholder returns.

Group unit sales show motorcycle sales growth in Asia and Brazil, offset by decreases in automobile and power product sales. Consolidated financial results reveal significant increases in operating profit, equity method investment profit, and quarterly profit attributable to owners of the parent company.

Adjusted operating profit increased by 164.5 billion yen, attributed to sales impact, material cost savings, and foreign currency gains, offset by raw material cost hikes and negative foreign exchange. Motorcycle segment saw highest quarterly profit, while automobile, financial services, and power protection segments also contributed positively. Sales growth in India and Brazil, alongside material cost savings, boosted motorcycle segment profits, despite raw material and tariff impacts.

The automobile business achieved a record adjusted operating profit of ¥192.1 billion, influenced by sales incentives, material costs, expenses, foreign currency, and tariffs. Cash flows were positive, with free cash flows at ¥128.3 billion. For the upcoming financial year, unit sales forecasts remain steady, with operating profit growth expected at ¥650 billion, partly due to favorable foreign currency assumptions.

Adjusted operating profit for FYE March 2027 is forecasted to rise by ¥130.6 billion, driven by increased unit sales and pricing of motorcycles and automobiles, partially offset by higher material costs. Foreign currency impacts and capital expenditure depreciation are expected to be positive, with no change in annual dividends per share.

During the Q&A session, participants inquired about factors affecting economic forecasts beyond foreign exchange, sought clarification on difficulties in the Chinese automobile market, and questioned the rationale behind an unadjusted full-year sales forecast despite a lower-than-expected projection.

The dialogue covers Eev related losses, with ¥520 billion forecasted for the fiscal year, impacted by foreign exchange. It discusses lower than expected sales in China's automotive market due to weak macroeconomics and oil price increases, affecting hybrid vehicle demand. An agreement to extend a contract in China is highlighted, aiming for market recovery through local resources and joint venture strategy adjustments.

The dialogue discusses Honda's strategies to adapt to the shrinking Chinese car market by optimizing production capacity, collaborating with local suppliers, and improving product competitiveness. It also covers the ongoing alliance negotiations with Nissan, emphasizing joint efforts in electrification and leveraging volumes to deliver valuable products to the market.

Discussed factors influencing high profit, including foreign exchange, raw material costs, and sales trends. Highlighted market shifts towards hybrid vehicles and motorcycle sales growth in India and Brazil. Addressed operational challenges post-earthquake, emphasizing recovery efforts and communication with suppliers.

The dialogue discusses the effects of an earthquake on Suzuka Plants and its subsidiary auto body, focusing on the disruption of major products like dampers. The recovery efforts are ongoing, with communication between affected parties to determine when production can resume. The situation is dynamic, with updates being provided as they become available.

The dialogue explores factors contributing to North America's strong sales performance despite rising incentives, questioning if market competitiveness offsets these gains. It also discusses domestic sales growth, impacting factors, and the outlook amidst the CBA and Moto Earthquake challenges, seeking strategies for sales recovery.

The dialogue discusses how fluctuating gasoline prices and increased incentives have influenced consumer preferences towards hybrid and gasoline vehicles. It highlights the significant growth in domestic car registrations, especially for models like the Super 1, and the strategic approach towards expanding electric vehicle offerings in the Japanese market. The conversation also touches on the effects of tariffs and competition on sales strategies.

Speakers discussed potential impacts of motorcycle sales, plant capacity utilization, and ongoing supplier negotiations on financial outcomes. They noted uncertainty around economic impacts, particularly in India, Brazil, and the Middle East, and highlighted a stepwise approach to managing supplier-related losses, with updates planned for March and April.

Discussed the uncertainty of recovery timeline post-earthquake affecting automotive suppliers, and the mixed impact of currency fluctuations on profits, noting efforts to manage risks and maintain communication with affected parties.

The dialogue discusses the impact of semiconductor supply risks on automotive businesses, emphasizing stable procurement strategies and the rising costs due to supply-demand dynamics. Measures include long-term agreements with suppliers and system contracts to ensure supply stability, despite increasing memory prices factored into financial forecasts.