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GOOD TIMES ROLL FOR TEAM GREEN

An amazing turnaround for Kawasaki’s motorcycle division has seen it become the biggest revenue and profit generator for the entire KHI group, according to half-year results. BDN financial editor Roger Willis reports.

Revenue for the April-September 2021 period grew by 48% to £1.354bn, a total that was also 40.5% higher than the equivalent six months in pre-pandemic 2019. This equated to almost a third of Kawasaki Heavy Industries’ overall turnover.

Motorcycle income from developed countries, led by Europe and North America, rose by 61.6% to £515m. Bikes for emerging markets in Asia and Latin America put on 73.9% to £297m. Utility vehicles, ATVs and personal watercraft contributed £318m, an 8.5% improvement. General-purpose petrol engines, mostly destined for North America, were 70.5% up, adding £224m.

Wholesale motorcycle volume in developed markets climbed by 50.8% to 92,000. Notably, US orders more than doubled to 38,000 and Europe was 17.9% up at 33,000. But Australia flatlined. In emerging markets, numbers were 47.6% up to 124,000. The Philippines were 25% higher at 65,000, sales almost trebled to 21,000 in Indonesia and they doubled to 20,000 in China.

Divisional operating profit reached £122m, against respective losses of £34m and £22m in the first halves of the previous two fiscal years. And motorcycle profit represented the vast majority — 91.1% — of KHI earnings before interest and tax. Its aerospace, energy and marine engineering operations all lost money.

Responding to such excellent performance, the division’s second-half and full-year revenue forecasts have been respectively raised to £1.526bn and £2.88bn, the latter increasing by about £200m.

Although the results overview said strong demand is expected to continue, especially for two and four-wheeled off-roaders in the US, qualification factors included supply-chain risks of parts shortages, principally semiconductors, and logistics disruption.    

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