Honda Motor Co (HMC) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Thank you very much for attending. This is Honda Motor Company FY '23 Second Quarter Financial Results Announcement Meeting.

First, I'd like to introduce the executives represented Director, Executive Vice President and Representative Executive Officer, CFO, Kohei Takeuchi.

Kohei Takeuchi

This is Takeuchi speaking. Thank you.

Operator

Operating Executive and Head of Accounting, Finance, Supervisory Unit, Eiji Fujimura.

Eiji Fujimura

How do you do? I am Fujimura.

Operator

Would like to ask Kohei Takeuchi to first announce the FY '23 second quarter financial results and FY '23 forecast followed by Fujimura, who will give the details on the above. Mr. Takeuchi, the floor is yours.

Kohei Takeuchi

First of all, I'd like to thank all of you for your support towards Honda products and activities. I'd like to thank our customers and all stakeholders. Thank you. We apologize that the delay in vehicle production is causing inconvenience to our customers who are waiting these products. We are working hard to deliver our products as soon as possible. We hope to gain your understanding.

Now to explain the financial results for the second quarter of FY '23 and give a summary of the forecast for the fiscal year. First, FY '23 results. Amidst a difficult business environment, including the semiconductor shortage, driving down automotive production and unit sales combined with soaring raw material prices, Honda has been making company-wide efforts to improve profitability. In addition, the increase in motorcycle unit sales and the impact of yen depreciation and sales revenue and operating profit for the first six months have increased year-on-year.

In the second quarter, specific semiconductor shortage affected production of main models, mainly in North America. But we made worldwide production allocations, utilized substitute parts and replaced models sold, resulting in a year-on-year increase in group unit sales of automobiles.

In addition, sales revenue, operating profit and profit for the period of -- all increased year-on-year due to price increases commensurate with improved product value and strong Motorcycle business impact of the yen's depreciation. In the FY '23 forecast, group unit sales of automobiles is lowered by 100,000 units to 4.1 million units, taking into account the impact of semiconductor supply shortages.

In addition to the decline in unit sales, we expect to see continued inflationary pressure on costs. However, we have revised upward our previous forecast for sales revenue, operating profit and profit for the period, reflecting profitability improvement efforts, motorcycle unit sales increase and recent weak yen. Despite the challenging business environment, Honda will continue to accelerate initiatives for electrification and new growth in preparation for the future.