| November 11, 1999 |
Financial Results for the First Half of Fiscal 2000
Outline of Financial Results
During the first half of the year, the Japanese economy generally remained sluggish despite government economic stimulus packages. The United States and European economies, on the other hand, remained strong. In Asia, initial indicators of recovery were evident in most countries following several years of depressed economic conditions.
Automotive sales in Japan totaled 2.78 million units, up 0.8 % from the same period a year ago. This increase was more than explained by a 32.4% increase in micro vehicle sales. Sales of registered vehicles declined by 9.5% to 1.88 million units. Export sales from Japan totaled 2.12 million units, down 5.3% from the same period a year ago. Shipments to Europe and Latin America were down substantially, offset partially by higher exports to North America.
Domestic sales volume was 163,384 units, down 5.4% from the same period a year ago because of lower market share and a reduction of vehicle stocks at dealers. Market share, including micro cars, decreased by 0.2 points to 5.6% despite an increase in sales of registered vehicles reflecting the successful introduction of "Premacy", "MPV", "Bongo Truck & Van". Registered vehicle market share rose by 0.3 points to 7.0%. Export sales totaled 253,978 units, down 3.6 % from the same period a year ago, reflecting lower sales to Latin America and Africa, offset partially by stronger sales in North America. Combined domestic and export sales totaled 417,362 units, down 4.3 %.
Concerning our financial results, unconsolidated sales revenue was 734,705 million yen, up 3.3% from the same period a year ago, reflecting export sales to North America and KD sets. Ordinary profit was 5,867 million yen, down 68.8% because of the sharp appreciation of the yen and one-time accounting changes, offset partially by vehicle cost reductions. Extraordinary gains of 38,686 million yen reflected mainly the sale of assets to strengthen Mazda's balance sheet. Extraordinary losses of 38,273 million yen were incurred mainly because of accelerated actions to restructure selected Mazda dealers. Corporation and other taxes totaled 2,455 million yen. As a result, net income was 3,826 million yen, down 30.6% from the same period a year ago.
Ordinary profit and net income were in line with our public forecast last May.
Cash flow was positive 63,286 million yen reflecting a continued focus on cash flow to improve Mazda's financial structure.
We will continue to forgo distribution of mid-term dividends this term.
Forecast For FY 2000
Although we think that the Japanese economy will experience a mild recovery, continued weakness is expected because of the strong yen and weakness in the labor market, among other factors. As for the rest of the world, we expect economic performance to remain strong in both the United States and Europe during the next six months. Asian economies are expected to continue on the path toward recovery.
In the automotive industry, we are projecting increasingly severe sales competition both domestically and overseas. There appears little prospect of any rapid increase in automobile demand in Japan in the near term. Amid such circumstances, our outlook for FY2000 is as follows. Domestic sales volume is projected at 350,000 units, export sales volume at 550,000 units, and total sales volume at 900,000 units, up 1.9% from the same period a year ago. Domestic market share is projected to increase 0.2 points, from 5.4% to 5.6%. Sales revenue is projected at 1,525,000 million yen, up 4.9%. Ordinary profit is projected at 25,000 million yen, down 49.8%, and net income is projected at 14,000 million yen, down 54.1%.
Compared with a year ago, the lower net income reflects primarily a stronger yen, one-time accounting changes, and recognition of corporation and other taxes. Partial offsets are vehicle cost reductions, favorable volume changes, and favorable changes in extraordinary profit items. Cash flow is projected at positive 70,000 million yen.
We will declare and pay a year-end dividend of 4 yen per share.
