Yamaha Motor’s Profit Rises on Motorcycle Sales
Yamaha Motor Co., the world’s second-largest motorcycle maker, reported second-quarter profit rose 51 percent after a weaker yen boosted the repatriated value of increased sales in Europe and Asia.
Net income totaled 24.4 billion yen ($205 million) for the three months ended June 30, compared with 16.2 billion yen a year earlier, Yamaha said in a release today. Sales rose 15 percent to 476.5 billion yen from 414 billion yen, Iwata City, Japan-based Yamaha said.
The motorcycle maker plans to add production capacity in Indonesia and Vietnam because of rising sales of models including its Jupiter series. Like larger rival Honda Motor Co., Yamaha has also benefited from the yen’s 5.3 percent drop against the dollar. Yamaha raised its forecast for the 12 months ending Dec. 31, as it benefits from a weaker Japanese currency.
“Yamaha and other auto-related companies are direct beneficiaries of a weaker yen,” said Hitoshi Yamamoto, who manages the equivalent of $1 billion in Japanese equities as president of Commerz International Capital Management (Japan) Ltd. in Tokyo. “We can expect further growth in demand for motorcycles in Asia outside Japan.”
The company expects net income of 79.5 billion yen for 2007, 1.9 percent more than its previous forecast of 78 billion yen. The company expects the weaker yen will add 39.9 billion yen to its full-year operating profit, after contributing 22.5 billion yen to first-half operating profit.
Shares of Yamaha fell 2 percent to 3,370 yen at the close of trading on the Tokyo Stock Exchange.
Yen’s Effect
The company based its annual profit forecasts on exchange rates of 118 yen to the dollar and 155 yen to the euro, compared with its previous estimates of 114 yen and 148 yen, respectively.
Operating profit, or sales minus the cost of goods sold and selling, general and administrative expenses, rose 21 percent to 34.9 billion yen in the second half. A weaker yen raised the profit by 7.8 billion yen, Kozo Shinozaki, general manager of Yamaha’s finance and accounting division, said at a press conference in Tokyo.
Global motorcycle sales rose 15 percent to 1.26 million units in the three months ended June 30, the company said. Sales in Asia jumped 21 percent to 922,000 units, making up for a drop in sales in Japan, North America and Europe, Shinozaki said.
“Higher sales of motorcycles in Asia will counter an expected drop in demand in North America in the second half,” Shinozaki said. The company plans to reduce its inventories for motorcycles for sale in North America in the second half, he said.
The motorcycle-maker plans to build a new plant in Vietnam, opening next year, that will boost its capacity in the country by half, it said yesterday. The company’s Indonesian venture plans to raise its annual capacity by a fifth to 2.2 million next year.
This article was taken from: Bloomberg