The motorcycle and engine division of Kawasaki Heavy Industries has abjectly failed to meet its forecasts, in three-quarterly results to 31 December 2019. BDN financial editor Roger Willis reports.
Although revenue for this nine-month period rose slightly by 1.7% to £1.617bn, the division plunged to an operating loss of £31.7m, versus trivial negativity of only £231,000 at the same point in its previous fiscal year.
Normally, Kawasaki aims for an approximate break-even position after three quarters and then reaches profitability in the fourth quarter. But annual forecasts have now been shredded. For the full fiscal year to 31 March 2020, revised revenue figures are expected to be 3.3% lower at £2.423bn. And operating profit has been slashed from an original estimate of 37.1% down to £63.2m. The latest profit prediction is for a 79% dive to just £21.1m, delivering a pathetic 0.8% operating margin.
The excuse for this was adverse foreign currency translation — mainly unanticipated appreciation of the Japanese yen against both the euro and US dollar, set against greater manufacturing costs at Kawasaki’s production hub in Thailand, owing to the Thai baht’s appreciation against the yen.
During the nine months in question, wholesale motorcycle shipment volume to developed countries (principally in Europe and North America) rose by 1% to 101,000 units. But revenue repatriated to Japan from these sources was 7.7% down. Bikes for emerging markets dropped marginally by 0.4% to 252,000 and revenue fell by 2%. ATV, utility vehicle and personal watercraft wholesale volume was 8.5% up to 51,000 units, with a 19.1% revenue increase. Revenue from general-purpose petrol engines grew by 2.7%.    Â
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