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Mitsubishi Motors expects smaller full-year loss on weaker yen
[TOKYO] Mitsubishi Motors Corp on Tuesday said it expects a smaller full-year net loss than previously forecast due to lower costs and the impact of a weaker yen, after swinging to an operating profit for the third quarter.
Japan's sixth-largest carmaker, which is recovering from a mileage cheating scandal, posted an 8.4 billion yen (S$105.786 million) operating profit for October-December, lower than a 9.36 billion yen estimate drawn from four analysts polled by Thomson Reuters I/B/E/S/.
Net profit reached 6.3 billion yen, down 18.3 per cent from the same period a year earlier but improving from a first-half loss of 31.6 billion yen.
Domestic sales fell 24 per cent in the quarter from a year prior, staying weak after the automaker overstated the fuel economy on many of its domestic models, tarnishing its brand image.
Sales in most of its other markets including Asia were also weaker, but a broad slide in the yen during the quarter slashed currency-related losses seen in the first half of the year and lifted Mitsubishi's bottom line.
Mitsubishi now expects full-year operating profit of one billion yen, after previously forecasting a loss of 27.6 billion yen. It sees a net loss of 202.0 billion yen, better than initial expectations of 239.6 billion yen.
The forecasts are better than analyst estimates of an operating loss of 6.17 billion yen and net loss of 222 billion yen.
Mitsubishi said cost efficiencies resulting from its alliance with Nissan Motor Co Ltd would improve its bottom line this year. It said it had reorganised the engineering division involved in the mileage manipulation scandal and improved testing processes to prevent a repeat.
Nissan in October acquired a 34 per cent controlling stake in Mitsubishi in a 237 billion yen deal, pledging to help its smaller rival recover from the scandal.
Mitsubishi also said it expects the domestic currency to trade at around 109 yen per US dollar in the second half of the year, weaker than an initial forecast of 100 yen.
Chief financial officer Koji Ikeya said the automaker wanted to increase US sales in the longer term, adding that it was closely watching changes in US trade policy under President Donald Trump, who is pressing for more products sold in the United States to be made locally.
The automaker last year shuttered its only US factory in Illinois due to sluggish sales. It now relies on exports for the US market, which accounts for about nine per cent of its global sales. The automaker counts Asia as its biggest market.