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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates several negative factors: profit decline from domestic affiliates, negative equity method profit, and reduced unit sales in China. Despite increased operating profit, the overall sentiment is negative due to high warranty costs, forex fluctuations, and unclear management responses. The Q&A section highlights concerns about EV incentives and collaboration with Nissan and Mitsubishi. The dividend and share buyback plans provide some positive sentiment, but the overall impact is likely negative due to significant financial challenges and uncertainties.
Operating Profit 742.6 billion yen, up by 46 billion yen year on year due to increased unit sales and pricing commensurate with product value.
Operating Profit Margin 6.2%, reflecting the overall operating profit increase.
Operating Cash Flow (after R&D adjustment) 1.2851 trillion yen, the same level as last year.
Profit Attributable to Owners of the Parent 494.6 billion yen, down by 121.6 billion yen year on year due to decline in unit sales in China and decreased equity method profit.
Investment Profit and Loss (Equity Method) Negative 20.7 billion yen, down by 87.4 billion yen year on year due to lower profits from domestic affiliates.
Free Cash Flow 372.3 billion yen for the first half of FY’2025.
Net Cash Balance 3,492.3 trillion yen at the end of the second quarter.
Interim Dividend 34 yen per share, maintained from the previous forecast.
Annual Dividend 68 yen per share, maintained from the previous forecast.
Share Buybacks 300 billion yen plus an additional 100 billion yen for further acquisitions.
New EV Sales: Full-fledged start of EV sales in North America.
Unit Sales in North America: Steady sales of ICE and HEV models in North America.
Unit Sales in China: Total unit sales declined due to reduction of units in China.
Motorcycle Sales in Asia: Steady demand in India and incremental unit sales in Vietnam.
Operating Profit: Operating profit of the first half of FY’2025 was 742.6 billion yen with an operating profit margin at 6.2%.
Cash Flow: Operating cash flow after R&D adjustment was 1.2851 trillion yen, the same level as last year.
Share Buybacks: Resolution to add up to 100 billion yen for further acquisitions.
Dividend Policy: Interim dividend of 34 yen and annual dividend of 68 yen maintained from previous forecast.
Sales Decline in China: Total unit sales across the group declined by 155,000 units due to the reduction of the unit in China, impacting overall profitability.
Increased Incentives for EV Sales: Strengthened incentives for EV sales in North America are affecting profit margins, leading to a forecasted profit decline.
Competitive Pressures in China: Intensifying price competition in the growing new energy vehicle market in China is contributing to the decline in total unit sales.
Economic Slowdown in Thailand: Unit sales in Thailand have declined due to the economic slowdown, impacting overall motorcycle business performance.
Currency Fluctuations: Appraisal loss of foreign currency-denominated assets due to a stronger yen compared to last year-end is negatively impacting profit.
Increased R&D Expenses: R&D expenses increased by 125 billion yen, negatively impacting profit forecasts.
Profit Decline from Domestic Affiliates: Profit decline from domestic affiliates is causing less investment or profits based on equity methods, contributing to the overall profit forecast reduction.
Share Buybacks: In addition to 300 billion yen already decided, a resolution was made to add up to 100 billion yen for further acquisitions.
Dividends: Interim dividend of 34 yen per share and annual dividend of 68 yen, maintained from the previous forecast.
Unit Sales Forecast: Motorcycle unit sales forecast is 20.2 million units, an increase compared to previous forecasts due to growth in Asia.
Operating Profit Forecast: The operating profit forecast for FY’2025 remains unchanged at 1.42 trillion yen.
Profit Attributable to Owners: Profit attributable to owners of the parent for FY’2025 is revised down to 950 billion yen, a decrease of 50 billion yen.
Currency Assumptions: Forex assumption for the second half of the year is set at 143 yen to the dollar, and for the full year at 148 yen.
R&D Expenditures: R&D expenses are expected to increase by 125 billion yen for FY’2025.
Capital Expenditures: Forecast for capital expenditures remains unchanged.
Interim Dividend: 34 yen per share
Annual Dividend: 68 yen per share, maintained from previous forecast
Share Buyback Program: 300 billion yen approved on May 10, 2024, with an additional 100 billion yen for further acquisitions.
The earnings call reflects a mixed outlook. Positive aspects include strong motorcycle business performance and a slight dividend increase. However, challenges such as operating losses in the automobile segment, significant EV-related losses, and declining sales in key markets like Asia and China temper the positive sentiment. The market's uncertainty regarding tariffs and unclear management responses further contribute to a neutral sentiment. Given these factors, the stock price is likely to remain stable within the next two weeks, resulting in a neutral prediction.
The earnings report indicates significant challenges: a decline in net profit and operating profit due to various factors, including sales decline in China, increased R&D expenses, and foreign exchange impacts. Despite a dividend increase and share buyback, the postponement of electrification strategies and unclear management responses in the Q&A add to the negative sentiment. The market may react negatively to these uncertainties and the lack of strong positive catalysts, leading to a potential stock price decline in the short term.
The earnings call presents a mixed picture. While there are positive aspects like increased motorcycle sales and share repurchase plans, there are significant concerns such as declining automobile sales, increased R&D costs, and currency impacts. The Q&A section reveals some uncertainties, particularly regarding the Chinese market and EV incentives. Despite optimistic guidance on future models and market strategies, the lack of clarity in management's responses tempers enthusiasm. Given these factors, the overall sentiment is neutral, with no strong catalysts to drive significant stock price movement in either direction.
The earnings call summary indicates several negative factors: profit decline from domestic affiliates, negative equity method profit, and reduced unit sales in China. Despite increased operating profit, the overall sentiment is negative due to high warranty costs, forex fluctuations, and unclear management responses. The Q&A section highlights concerns about EV incentives and collaboration with Nissan and Mitsubishi. The dividend and share buyback plans provide some positive sentiment, but the overall impact is likely negative due to significant financial challenges and uncertainties.
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