Mazda and Suzuki have both reported that during the first quarter of fiscal year 2008/09 they recorded lower operating profits than in the same period last year.

Although operating profits have been pressured by rising raw material costs and currency exchange rates, the various global strategies of the two companies have reaped some rewards over the past three months.

Both automakers are retaining their full-year guidance for weaker results compared with last fiscal year, alongside a bearish outlook for the exchange-rate average for the Japanese yen over the period.

Japanese automakers Mazda and Suzuki have reported their financial data for the first quarter of fiscal year (FY) 2008/09, showing that both are coming under increasing pressure from rising input costs and foreign exchange rates.

For the three months ending 30 June, Mazda announced that although sales increased by around 11% year-on-year (y/y) to 358,000 units, revenues fell by 5% y/y to ¥771.8 billion (US$7.14 billion). Over the course of the period the automaker’s operating profits fell by 12% y/y to ¥28.3 billion as a result of a weak U.S. dollar and rising raw material costs. However, net profits rose from ¥2.5 billion to ¥15.0 billion thanks to a change in Japanese accounting standards that meant that the previous year’s results were artificially low.

According to Reuters, Suzuki reported a 1.8% y/y increase in revenues during the period to ¥910.4 billion. As with Mazda though, operating profits came under pressure and fell 17% y/y to ¥33.8 billion, but for it too there was an improvement in net profits, of 6.9% y/y to ¥26.0 billion.

Courtesy: Global Insight, Inc

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Posted by Naresh Koshti on 1 August, 2008 2:41:03 PM IST #