Honda profits hit by Thai floods

Battered by the strong yen and supply disruptions due to Thailand’s floods, Honda said today that its net earnings in the October-December quarter tumbled 41% to 47.6bn yen (€473.74bn) and projected a sharply lower full-year profit.

The Japanese car and motorcycle maker forecast it would earn 215bn yen (€2.14bn) for the year to March, down nearly 60% from the 534bn yen (€5.31bn) it earned in the previous financial year.

Honda had scrapped its earnings forecast in October, when it reported its previous quarterly results, because the flooding in Thailand – a key Asian production hub for Honda and many Japanese companies – made the outlook too uncertain.

Honda stopped making cars at its assembly plant in Ayutthaya, north of Bangkok, in October after it was damaged in the worst floods to hit Thailand in 50 years.

The company said in a statement that it was making progress in draining the plant of flood water and cleaning up equipment, and that production was expected to resume by the end of March.

The flooding also disrupted the output at many Honda suppliers in Thailand, forcing it to reduce production as far away as the US and Canada.

Honda said production in neighbouring Asian countries interrupted by the problems in Thailand was expected to return to normal by April.