Honda upgrades profit forecast on strong motorcycle sales and weaker yen

Higher motorcycle sales and a weaker yen have prompted Honda to upgrade its full-year profit and revenue forecasts. The upgrade came as the car, motorcycle and jet maker used its second-quarter results to flag a revised dividend policy and enhanced capital management via a share buyback of up to ¥90bn. Honda reported a 1.7 per cent year-on-year decline in net profit to ¥174bn in the September quarter, despite a 15.7 per cent rise in sales to ¥3.78bn. Operating profit was down almost a third to ¥152.9bn owing to one-off effects. That all compared with market expectations, with sales of ¥3.7tn, operating profit of ¥269.2bn and net profit of ¥207.3bn, according to a ThomsonReuters survey. The car and motorcycle maker lifted its full-year targets, previously issued in August, for sales by ¥550bn to ¥15.1tn, operating profit by¥20bn to ¥745bn and net income by ¥40bn to ¥585bn. These had been given a slight lift in August owing to expectations of a smaller-than-anticipated currency impact. The company said it would buy back a maximum of 24m shares, worth up to ¥90bn, on market over the next three months. It also revised its dividend policy to “realise a return ratio alone of approximately 30%” with respect to dividends, where it had previously aimed to “maintain a shareholders’ return ratio of approximately 30%”. Earlier this week, Honda said it produced 2.56m vehicles worldwide in the six months to September 30, a first-half record, owing to record production outside Japan, specifically China and Asia. Last month, Honda revealed a five-year plan to streamline its car production operations in Japan as well as establish a system to share new production technologies globally that could help quicken the roll-out of electric and other new technology vehicles.