Honda Reports Decrease in Net Profit for Previous Year
Honda Reports Net Profit Decline in 2022 Fiscal Year
Honda, the Japanese multinational corporation known for its production of automobiles, motorcycles, and power equipment, announced its financial year 2022 balance sheets covering the period from April 2022-March 2023 to the public. According to the report, Honda’s fiscal 2022 net profit was recorded as 695.2 billion yen ($5.2 billion), which is down 1.7 percent from the previous fiscal year.
The operating profit of Honda fell 3.7 percent to 839.4 billion yen ($6.24 billion) in the last fiscal year. However, sales revenues increased by 16.2 percent to 16.9 trillion yen ($125.8 billion). This increase can be attributed to the rising demand for personal vehicles, especially during the COVID-19 pandemic, as people avoid public transportation.
Despite the positive financial results, Honda’s net profit decline can be attributed to the rising raw material costs, the semiconductor supply problem, and restrictions caused by COVID-19, which affected the manufacturing and sales of the company. Furthermore, the decrease in the sales figures of vehicles up to 28 percent in the US market and up to 20 percent in the Chinese market was also effective in this situation.
Honda sold 3.69 million vehicles in fiscal year 2022. Looking forward, Honda aims to sell 4.35 million vehicles in the new fiscal year, which ends in March 2024, and expects net profit to rise to 800 billion yen ($5.94 billion) in fiscal 2023. Honda Vice President Aoyama Shinji said at an online press conference that the semiconductor supply is expected to recover gradually from the first half of fiscal 2023 to the second half and return to normal in the fiscal years beyond.
In conclusion, while Honda’s fiscal year 2022 results may have been somewhat disappointing, the company is optimistic about its future performance with a significant increase in projected sales and revenues. With the expected recovery of the semiconductor supply, Honda’s expected increase in sales revenue may be achieved in the coming fiscal years.
