Mazda Expects Profits and Income to Rise Sharply in FY2002

- Forecasting FY2003 operating profits to be the best in 10 years -

Mazda Motor Corporation today announced that its strong, global turnaround remains on track, and that fiscal year 2002 results - which the company plans to formally file on May 12, 2003 - will show a sharp increase in both profit and revenue compared to FY2001. Cash flow is expected to be 47 billion yen (US$391 million, 362 million euro), allowing Mazda to reduce its net debt by 53.4 billion yen (US$444 million, 411 million euro).

Backed by strong automotive sales in Europe, Japan and other key markets, Mazda's full-year revenue is expected to rise by 13 percent compared to FY2001. Thanks to cost cutting actions and a weaker exchange rate against the euro, operating profits are expected to reach 50.6 billion yen (US$421 million, 390 million euro), up 77 percent from FY2001, and net income should increase by 173 percent to 24.1 billion yen (US$200 million, 186 million euro).

"Our continued focus on the basics of the business - strong product development, cost reductions efforts and a commitment to quality and customer satisfaction - has kept our growth plans on track," said Lewis Booth, President and CEO of Mazda Motor Corporation. "The response to our new products has been tremendous. And while we still must improve in North America, our results in Europe, Japan and other markets are very encouraging, particularly in the second half of FY2002. This is why I believe sustained, profitable growth is achievable - we expect operating profits for FY2003 to be the best in ten years."

Financial results for FY2002 (consolidated and unconsolidated basis)
Consolidated revenue is projected at 2,364.5 billion yen (US$19.7 billion, 18.2 billion euro), up 13 percent from a year ago. Operating profit is projected at 50.6 billion yen (US$421 million, 390 million euro), a year-on-year increase of 22.1 billion yen (US$184 million, 170 million euro). Ordinary profit is projected at 40.7 billion yen (US$339 million, 313 million euro), a year-on-year increase of 21.5 billion yen (US$179 million, 166 million euro). Net income is projected at 24.1 billion yen (US$200 million, 186 million euro), a year-on-year increase of 15.3 billion yen (US$127 million, 118 million euro).

Compared with the October projection, all profit levels are up, with the exception of net income. The decline in net income is more than explained by the recent introduction of Pro Forma Taxation. These results represent the second best operating profit and the third best net income in a decade.

Consolidated cash flow is projected at positive 47 billion yen (US$391 million, 362 million euro) while net debt is estimated to have declined by 53.4 billion yen (US$444 million, 411 million euro).

On an unconsolidated basis, operating profit is projected to increase year-on-year by 3 billion yen (US$25 million, 23 million euro) to 29 billion yen (US$241 million, 223 million euro). Ordinary profit is projected to decrease by 3.8 billion yen (US$32 million, 29 million euro) year-on-year to 24.5 billion yen (US$204 million, 189 million euro). A net loss of 50.2 billion yen is expected (US$418 million, 387 million euro), representing a year-on-year deterioration of 63.4 billion yen (US$527 million, 488 million euro). This deterioration in the unconsolidated net results is primarily due to extraordinary losses resulting from the domestic dealer restructuring actions in the second half of this fiscal year, as well as valuation losses in investments in overseas subsidiaries.

Mazda also announced its intention to declare a year-end dividend of 2 yen per share, equal to the FY2001 dividend.

Financial projection for FY2003 (consolidated basis)
Mazda has focused intensely on developing a line of new-generation products that exemplify the clearly defined Mazda brand. During FY2002, Mazda launched three new powertrains and two all-new products into the global market - Atenza/Mazda6 and Demio/Mazda2. Both have received critical acclaim from customers and the media around the world, with the Atenza/Mazda6 establishing itself as the most award-winning car in Mazda's history. Mazda will launch two additional all - new models during FY2003 - Mazda RX-8 and a yet-to-be-named C-car. It is anticipated that these new products will drive further global sales growth.

In Japan, Mazda projects a 1.1 percent decrease in industry sales to 5.8 million units in FY2003. Overseas, U.S. industry sales are projected to decline by 1.6 percent; and Western Europe by 3.9 percent. Mazda forecasts the yen at average exchange rates of 115 yen to the U.S. dollar and 125 yen to the euro.

Under these circumstances, consolidated revenue is projected to increase by 2.3 percent from the previous year to 2,420 billion yen (US$21 billion, 19.4 billion euro) in FY2003. Operating profit is projected to increase by 28.3 percent to 65 billion yen (US$565 million 520 million euro) - which would represent the best operating profit result in a decade - with ordinary profit increasing by 40 percent to 57 billion yen (US$496 million, 456 million euro). Net profit is projected to grow by 24.3 percent to 30 billion yen (US$261 million, 240 million euro), with cash flow positive at 40 billion yen (US$348 million, 320 million euro).

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Financial Results