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GOOD FIRST HALF FOR TEAM GREEN

Six-monthly 2019-2020 results to 30 September for the motorcycle division of Kawasaki Heavy Industries were upbeat. But the company has warned of worse to come as its fiscal year progresses. BDN financial editor Roger Willis reports.

Combined revenue for the two quarters to date improved by 1.9% to £1.053bn. And Kawasaki’s usual accumulated first-half operating loss for the division was reduced by 27.7% to £24.1m. A similarly negative operating margin therefore shrank from -3.2% in the equivalent period last year to -2.2%. (KHI accountants always front-load expenses and then move from red to black ink during Q3 and Q4, for some bizarre reason.)

Wholesale shipments to dealers and distributors worldwide were flat on 257,000 units. Motorcycles for developed markets, principally Europe and North America, grew by 4.7% to 67,000. Smaller bikes aimed at emerging countries, mainly in South-East Asia, were 3.1% down to 158,000. Utility vehicles, ATVs and personal watercraft rose by 6.7% to 32,000. Revenue from unspecified quantities of general-purpose petrol engines was 3.3% up to £157.9m.

For the 12 months to 31 March 2020, Kawasaki has maintained its divisional Q1 forecast of a roughly 2% reduction in annual revenue to about £2.5bn. However, full-year profit predictions have now been revised downwards. Previously, it had anticipated a 16% operating profit decline to around £85m. This has now been amended to a 37% plunge to just £64m — and a pathetic operating margin of only 2.5%. Adverse foreign currency translation is apparently the culprit.       
 

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