Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Fourth Quarter and the Fiscal Year Ended March 31, 2

TOKYO, April 28  /PRNewswire-FirstCall/ -- Honda Motor Co., Ltd. (NYSE: HMC) today announced its consolidated financial results for the fiscal fourth quarter and the fiscal year ended March 31, 2009.

Fourth Quarter Results

Honda reported a net loss for the fiscal fourth quarter ended March 31, 2009 totaled JPY 186.1 billion (USD 1,895 million), a decrease of JPY 211.5 billion from the same period in 2008, or JPY 102.59 (USD 1.04) per common share, a decrease of JPY 116.60 from the corresponding period last year.  One Honda American Depository Share represents one common share.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 1,783.8 billion (USD 18,160 million), a decrease of 41.6% from the same period in 2008, primarily due to currency translation effects and decreased revenue in the automobile business. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2008, revenue for the quarter would have decreased by approximately 30.1%.

Consolidated operating loss for the quarter totaled JPY 283.0 billion (USD 2,881 million), a decrease of JPY 451.8 billion, due primarily to decreased revenue, the increase in fixed costs per unit as a result of reduced production, increased raw material costs, the negative impact of currency effects caused by the appreciation of the Japanese yen and expenses related to withdrawal from some racing activities and cancellations of development of new models, more than offsetting continuing cost reduction efforts and decreased SG&A expenses and R&D expenses.

Consolidated loss before income taxes, minority interest and equity in income of affiliates for the quarter totaled JPY 309.5 billion (USD 3,152 million), a decrease of JPY 456.4 billion from the same period in 2008.

Equity in income of affiliates amounted to JPY 2.7 billion (USD 28 million) for the quarter, a decrease of 88.7% from the corresponding period last year.

Business Segment

With respect to Honda's sales for the fiscal fourth quarter by business segment, motorcycle unit sales totaled 2,002 thousand units, a decrease of 15.5% from the same period last year.  Unit sales in Japan totaled 51 thousand units, a decrease of 22.7% compared to the same period last year.  Outside of Japan, total unit sales was 1,951 thousand units, a decrease of 15.2% from the same period in 2008*, due mainly to decreased unit sales in all regions.  Revenue from sales to external customers decreased 38.2%, to JPY 274.4 billion (USD 2,794 million) from the same period last year, due mainly to decreased unit sales and negative currency translation effects.  Operating loss was JPY 2.8 billion (USD 29 million), a decrease of JPY 55.6 billion from the same period last year, due mainly to decreased revenue, the negative impact of currency effects caused by the appreciation of the Japanese yen and increased raw material costs, more than offsetting decreased R&D expenses.

*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles.  Accordingly, these unit sales are not included in the financial results.  Sales of such products amounted to approximately 1,110 thousand units for the period.

Honda's automobile unit sales totaled 680 thousand units, a decrease of 35.3% from the same period last year.  In Japan, unit sales amounted to 141 thousand units, a decrease of 26.2% from the same period last year despite favorable sales of the Insight.  Unit sales outside of Japan decreased 37.3% to 539 thousand units from the corresponding period last year, due mainly to decreased unit sales in all regions.  Revenue from sales to external customers decreased 44.8% to JPY 1,301.4 billion (USD 13,249 million) from the same period in 2008, due mainly to decreased unit sales and the negative currency translation effects.  Operating loss was JPY 286.2 billion (USD 2,914 million), a decrease of JPY 365.8 billion from the same period last year, due primarily to decreased volumes, the increase in fixed costs per unit as a result of reduced production, increased raw material costs and the negative impact of currency effects caused by the appreciation of the Japanese yen and expenses related to withdrawal from some racing activities and cancellations of development of new models, partly offset by decreased SG&A expenses and R&D expenses, and continuing cost reduction efforts.

Revenue from customers in the financial services business decreased 2.0% to JPY 135.2 billion (USD 1,377 million) from the same period in 2008, due mainly to negative currency translation effects.  Operating income decreased 42.3% to JPY 18.0 billion (USD 184 million) from the same period in 2008, due primarily to the increased allowance for losses on lease residual values.

Honda's power product unit sales totaled 1,531 thousand units, a decrease of 26.8% from the same period in 2008.  In Japan, unit sales totaled 101 thousand units, a decrease of 33.1% from the same period last year.  Unit sales outside of Japan totaled 1,430 thousand units, a decrease of 26.3% from the corresponding period last year, due primarily to a decline of unit sales in all regions.  Revenue from sales to external customers in power product and other businesses decreased by 37.8% to JPY 72.6 billion (USD 740 million) from the same period last year, due mainly to decreased unit sales of power products and negative currency translation effects.  Operating loss was JPY 11.9 billion (USD 122 million), a decrease of JPY 17.0 billion from the same period in 2008.  This was primarily due to the negative impact of decreased revenue and increased R&D expenses of other businesses, which more than offset decreased SG&A expenses.

* OEM (Original equipment manufacturing)

OEM refers to manufacturing of products and components supplied for sale under a third-party brand.

Forecasts for the Fiscal Year Ending March 31, 2010

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2010, Honda projects consolidated results to be as shown below:

The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 95 and JPY 125, respectively, for the first half of the year ending March 31, 2010, and JPY 95 and JPY 125, respectively, for the full year ending March 31, 2010.

Projected unit sales for the full year ending March 31, 2010 are shown below.

                                  Unit (thousands)    Changes from FY2009
                                  ----------------    -------------------
                                                              (thousands)
                                                              -----------
  Motorcycle business                        8,595                - 1,519
  Automobile business                        3,210                  - 307
  Power product business                     4,660                  - 527



  FY2009 Forecasts for Consolidated Results
     Fiscal year ending March 31, 2010

                                                          Changes from FY
                                         Yen (billions)              2009
                                         --------------   ---------------
  Net sales and other operating revenue           8,370            - 16.4%
  Operating income                                   10            - 94.7%
  Income before income taxes
   minority interest
   and equity in income of affiliates                10            - 93.8%
  Net income attributable to
   Honda Motor Co., Ltd.                             40            - 70.8%

                                               Yen
                                               ---
  Basic net income per Common share               22.04

  Note:  "Net income attributable to Honda Motor Co., Ltd." is equivalent to
         "Net income" in the consolidated financial statements issued for
         the fiscal years ended March 31, 2009 and before.


Profit Redistribution Policy and Dividend per Share of Common Stock for fiscal years 2009 and 2010

The Company strives to carry out its operations from a global perspective and to increase its corporate value.  With respect to the redistribution of profits to our shareholders, which we consider to be one of the most important management issues, the Company's basic policy for dividends is to make distributions after taking into account its long-term consolidated earnings performance.

The Company will also acquire its own shares at the optimal timing with the goal of improving efficiency of the Company's capital structure.  The present goal is to maintain a shareholders return ratio (i.e. the ratio of the total of the dividend payment and the repurchase of the Company's own shares to consolidated net income) of approximately 30%.  Retained earnings will be allocated toward financing R&D activities that are essential for the future growth of the Company and capital expenditures and investment programs that will expand its operations for the purpose of improving business results and strengthening the Company's financial condition.

The Company plans to distribute year-end cash dividends of JPY 8 per share for the year ended March 31, 2009.  As a result, total cash dividends for the year ended March 31, 2009, together with the first quarter cash dividends of JPY 22, the second quarter cash dividends of JPY 22 and the third quarter cash dividends of JPY 11, are planned to be JPY 63 per share, a decrease of JPY 23 per share from the annual dividends paid for the year ended March 31, 2008.

Also, please note that the year-end cash dividends for the year ended March 31, 2009 are matters to be resolved at general meeting of shareholders.

The Company plans to distribute quarterly cash dividends of JPY 8 per share for each quarter for the year ending March 31, 2010.  As a result, total cash dividends for the year ending March 31, 2010 are planned to be JPY 32 per share, a decrease of JPY 31 from the annual dividends to be paid for the year ended March 31, 2009.

For additional information, please visit http://world.honda.com/investors/meeting/ where you can download 4Q financial results and presentation materials.

This announcement contains "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements are based on management's assumptions and beliefs taking into account information currently available to it.  Therefore, please be advised that Honda's actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda's principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time. The various factors for increases and decreases in income have been classified in accordance with a method that Honda considers reasonable. 

DATASOURCE: Honda Motor Co., Ltd.



CONTACT:  Mitsuhiro Okayama, Investor Relations, American Honda Motor

Co., Inc., [phone], 



Web Site:  http://world.honda.com/ 

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