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BW Businessworld

Suzuki Q2 Up, Forecasts Unchanged

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Suzuki Motor Corp on Monday posted a 6.2 per cent rise in quarterly operating profit even as labour unrest at its Indian subsidiary hit sales in its single-biggest market and it kept its cautious annual forecasts unchanged.

July-September operating profit at Suzuki, held 19.9 per cent by Volkswagen AG, was 39.2 billion yen ($500 million), much better than the average estimate of 25.6 billion yen in a survey of seven analysts by Thomson Reuters I/B/E/S.

Net profit fell 13 per cent to 13.3 billion yen while revenue dropped 6.6 per cent to 618.8 billion yen.

Suzuki's motorcycle factory in Thailand has been closed since around mid-October as the floods disrupted the flow of parts supply. The company has been spared any impact on its car production in Thailand, but has been hit by strikes at one of the key factories of Maruti Suzuki India Ltd, in which it holds 54.2 per cent.

Maruti last month reported a more than halving of its net profit in the same quarter as strikes at one of its key factories led to a production loss of 83,000 cars, equivalent to around $500 million.

Car sales in India fell in July, their first monthly decline in nearly three years, and continued to slide in August and September as the central bank kept raising interest rates.

For the year to March 31, 2011, Suzuki kept its forecast for operating profit of 110 billion yen and net profit of 50 billion yen, while assuming tougher exchange rates. It now sees the dollar averaging 75 yen in the second half from October instead of 80 yen, and a euro rate of 105 yen instead of 110 yen.

Consensus forecasts from 20 analysts have put operating profit at 114.6 billion yen.

Shares in Suzuki have lost 18 per cent in the year to date, in line with Tokyo's transport sector subindex.

Before the results were announced, Suzuki ended up 0.4 per cent at 1,640 yen, in line with the benchmark Nikkei average.

(Reuters)


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