Subaru: Operating Profit Declining 27% Breaking Record Financial ResultsAutomotive News
The exchange of foreign currency added to the cost spiral has broken the record of growth of the financial results of three years.
Subaru has said that the company’s operating profit has fallen by 3,367 million euros at the end of the fiscal year, dated March 31, 2017. Net income fell 35% at 2,317 million euros.
This fall has occurred despite the fact that the Japanese brand exceeds one million annual sales, a fact that has been given for the first time in the company.
Revenues increased 2.9% in the last year, driven by an 11% increase in world sales. Subaru posted record revenue and sales for the fifth consecutive year.
In North America, which accounts for about 68% of Subaru’s global sales, sales grew 14% with 721,000 vehicles sold, while Canada’s sales rose to 53,100 from 47,600 a year earlier.
However, European sales fell by 2.6%, as has happened with sales in Japan and China.
Despite record sales, losses from the depreciation of the yen against the dollar and other currencies outperformed the gains, at a cost of 1,177 million euros.
This, together with other recent costs and greater investments in R & D and capital, has caused the Japanese brand to lose 1,387 million. Subaru has saved more in the last fiscal year to expand production in North America and Japan and to meet growing demand.
For this coming year, Subaru expects to increase sales and that exchange rates will moderate to maintain operating profit and net income. The objective is to keep operating revenues at 2,317 million. Net income is forecast to grow 0.9%.
Revenues can increase by 2.8%. Sales in North America are expected to rise 3.8%. Sales volume in the US should increase to 688,000 units sold, while in Canada it would rise to 55,000 units. European sales are expected to increase by 39,000 vehicles.
Sales prospects put Subaru on track to achieve the global medium-term sales target of 1.2 million by 2021.
BY LIDIA VEGA – Madrid @ VegaLidia5 – 05/09/2017 (Translation Soft)