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MIXED MESSAGES FROM KAWASAKI

Just like its Japanese “big four” compatriots, the motorcycle division of Kawasaki Heavy Industries is relying on rebounds in almost every major global market except Europe for post-pandemic prosperity. And it has struggled with rising raw materials prices and worldwide logistics problems affecting profitability in the first quarter of its current fiscal year. BDN financial editor Roger Willis reports.

Overall divisional revenue in Q1 grew by 11.1% to £783m. But turnover from wholesale motorcycle shipments into developed countries was 1.1% down to £287m and associated volume fell by 10.9% to 49,000 bikes. Within that, North America (the USA and Canada) was 18.2% up to 26,000, while European shipments plummeted by 47.6% to just 11,000. Kawasaki’s domestic Japanese market increased by 33.3% to 8000. Australia shrank by a similar percentage to 2000.

Conversely, revenue from emerging motorcycle markets, predominantly in South-East Asia, rose by 16.4% to £158m. Volume put on 18% to 72,000 bikes. The Philippines and Indonesia were biggest recipients, together accounting for a 35.7% increase to 57,000.

Global sales of utility vehicles, quadbikes and personal watercraft were 20.8% up to £195m and general-purpose petrol engines added 21.3% to £143m.

However, despite help from a depreciating yen exchange rate, manufacturing input price inflation and supply-chain issues resulted in a 13.6% Q1 operating profit decline to £80m. Operating margin sank from 13.1% in the same period last year to 10.2%.

On a brighter note, Kawasaki says demand remains strong in key markets and is confident of being able to meet it with enhanced supply at reduced costs as the fiscal year progresses. Annual forecasts have therefore been revised upwards. 12-monthly projected revenue for the division has been raised from £3.106bn to £3.229bn. Operating profit should now reach £279m, instead of £266m.

Yen-sterling currency translation at forex rates applicable on 15 August.   

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