Honda achieves record Q1 Earnings: Operating profit hits 1.38 trillion yen

Today, on 10 May 2024, Honda Motor Co., Ltd. reported its earnings for the first quarter of FY24.

Honda’s operating profit for this quarter reached an all-time high of 1 trillion 381.9 billion yen and the operating profit margin was 6.8%.

Honda Group’s net sales and profits

Honda’s motorcycle business sales increased in Europe compared with the previous year, with 18 million 819-thousand-unit sales total. Its operating profit saw a historical high of 556.2 billion yen.

The company’s automobile business sales increased in North America, with 4 million 109-thousand-unit sales total. The operating profit was 560.6 billion yen.

However, Honda’s power products business sales decreased in North America, with 3 million 812-thousand-unit sales total. In the company’s power products business and other businesses, operating profit was a minus of 8.8 billion yen.

In the financial services business, operating profit was 273.9 billion yen.

Honda’s consolidated operating profit increased by 601.2 billion yen to 1 trillion 381.9 billion yen this quarter because of improved model profitability and increased automobile unit sales.

The company’s ROIC was 9.1% and ROE was 9.3%.

Profit before income tax improved by 762.8 billion yen compared with FY23 resulting in 1 trillion 642.3-billion-yen total profits.

Honda’s free cash flow of non-financial services businesses was 1 trillion 460.9 billion yen. Net cash at the end of the period was 3 trillion 761.6 billion yen in total.

Future projections

By FY25, the company aims to achieve an operating profit of 1 trillion 420 billion yen and an operating profit margin of 7%.

Future investment sources for Honda increased by 1 trillion yen compared to FY23 to approximately 3 trillion yen. The dividend of 68 yen this quarter was 28 yen more than FY23. The company predicts, in FY25, it will conduct a share buyback of 300 billion yen.

Initiatives for the next financial year include a share buyback of 300 billion yen. The company is also on track to attain an operating profit margin of 7%.