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Isuzu Motors posts record opg profit on strong overseas sales

From AFX News| May 15 , 2007

Isuzu Motors Ltd reported its operating profit for the past year to March rose 18 pct to a record 106.98 bln yen, bolstered by brisk overseas sales, especially in Asia.

But Japan's largest truckmaker by sales said weak domestic demand for new trucks will see operating income fall in the current fiscal year.

Net profit rose 56.7 pct to an all-time high of 92.39 bln yen for the year ended March as revenue gained 5 pct to 1.66 trln yen.

'We managed to log record profits as overseas sales expanded rapidly thanks to brisk sales of our trucks in resource-rich nations,' Isuzu president Yoshinori Ida told a news conference.

Overseas sales increased 6.7 pct to 372,000 units for the past financial year, while domestic sales tumbled 1.4 pct to 97,000.

In Thailand, a key market where it is competing against Toyota Motor Corp (nyse: TM - news - people ), sales of its Dmax pick-up trucks reached 170,000 units, unchanged from a year earlier due to weaker demand.

Isuzu executive vice president Susumu Hosoi said given the recent trend of demand in Thailand, 'sales in 2007 may fall short of last year's level.'

But the firm raised its annual dividend to 4.00 yen per share from 3.00 yen paid in the previous year. Isuzu only resumed declaring dividends in the year to March 2005 after a seven-year break.

In addition, the truck maker said it has decided to spend up to 40 bln yen to buy back 50 mln preference shares held by banks.

'When we finish the buyback of preference shares, we can declare the completion of our turnaround efforts,' Ida said.

For the year to March 2008, Isuzu sees a 13.4 pct fall in net profit to 80 bln yen, a 6.5 drop in operating income to 100 bln yen and a 0.8 pct dip in revenue to 1.65 trln yen.

But the truck maker plans to raise its annual dividend further to 5.00 yen per share.

The company, which last year ended its 35-year capital partnership with General Motors Corp (nyse: GM - news - people ), plans to sell 73,000 vehicles in Japan in the current fiscal year, down 24.6 pct from a year earlier, and 389,000 units overseas, up 4.8 pct.

'An expected drop in domestic sales can explain the bulk of the decline in profitability,' Hosoi said.

To support growth outside Japan, Isuzu said it will boost capital investment to 59.0 bln yen from 47.9 bln the year before, and its research and development expenditure to 62.0 bln yen from 58.5 bln.

(1 usd = 120.15 yen)

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