October 28th 2004.

Honda Motor reported yesterday that its consolidated net profit climbed to 241.3 billion yen in the first half of the fiscal year, which ended on September 30th 2004. This is a new high for the interim period.

Sales surged by four per cent to 4.16 trillion yen, another first-half record for the firm.

Motorcycle sales jumped by 12 per cent to 530.1 billion yen. In volume terms, North American sales increased 13 per cent, European sales rose by 11 per cent and Asian sales grew 31 per cent. Sales in different regions showing a well-balanced rise; profit from the motorcycle division increased 380 per cent.

Meanwhile, auto sales rose by three per cent to 3.34 trillion yen, while sales volume increased by nine per cent. In addition to brisk business in Europe and Asia, once-sagging domestic sales staged a turnaround following the introduction of models such as the Elysion minivan. These factors helped to offset slowing demand in North America - a major earnings source for Honda.

In the first half of the fiscal year, Honda calculated the dollar at 110 yen, weaker by 8 yen. Although this pushed down Honda's profit by at least 70 billion yen, thorough cuts in production costs lifted its operating profit by five per cent to 332.9 billion yen.

Reflecting its solid earnings, the manufacturer will hike its stock dividend payout by nine yen to 28 yen for the interim period and boost its annual dividend by 14 yen to 56 yen.

For the full term, ending March 31st 2005, Honda's group sales are expected to rise six per cent to 8.69 trillion yen, while its net profit is projected to fall by four per cent to 447 billion yen. The company's revision of its full-term dollar rate to 108 yen is expected to lessen the downward impact on its profit. As a result, the firm anticipates that the pace of decline in its net profit will narrow as well.

Source: The Nihon Keizai Shimbun.