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Mazda cuts full-year profit outlook due to yen strength
[TOKYO] Mazda Motor Corp on Wednesday lowered its full-year profit forecasts as the Japanese automaker expects to take a bigger hit from a strong yen than it previously thought.
Japan's fifth-largest automaker by vehicle sales volume expects to post an operating profit of 150.0 billion yen in the year to March, less than a previously forecast 170.0 billion yen. It now sees an annual net profit of 100.0 billion yen, down 25.5 per cent from last year.
The maker of the MX-5 sportscar changed its yen assumption rate to 104 to the US dollar and 116 to the euro, from previous forecasts of 110 yen and 125 yen receptively.
Mazda expects that persistent strength in the domestic currency will weigh on the company even as it keeps intact its forecast to sell 1.55 million units globally this year.
A bigger-than-expected climb in the yen in the April-September period resulted in a 29.8 per cent slide in first-half operating profit to 88.3 billion yen.
For the July-September quarter, operating profit came in at 35.9 billion yen, higher than the 33.62 billion yen average of 10 estimates from analysts surveyed by Thomson Reuters.
Mazda is vulnerable to swings in the yen against the dollar and euro in particular, given that North America accounts for roughly one-third of its global sales, while all vehicles sold in Europe, its second-largest market, are exports.