Mitsubishi announces first quarter fiscal 2008 results

Mitsubishi Motors Corporation (MMC) today announced its sales and financial results for the first quarter of the fiscal year ending March 31, 2009.

Q1 FY2008 results

Performance overview

Mitsubishi Motors reports that consolidated net sales totalled 610.1 billion yen in the first quarter of fiscal 2008 (April 1 through June 30) – a 3 percent decline on the same period last fiscal year (630.8 billion yen). An increase in earnings resulting from improvements in the model mix was more than offset by a decrease in sales volume and the effects of a stronger yen exchange rate.

Mitsubishi Motors posted an operating profit of 9.9 billion yen, 3.9 billion yen up on the same period last fiscal year. Factors contributing to this improvement include higher sales volume in Europe, a more profitable model mix in all regions including an increase in the ratio of build-up vehicle sales to total unit volume in Asia and other regions, and the company’s efforts to reduce costs including reductions in sales expenses in the U.S. These more than offset the effects of a stronger yen and lower profits from the company’s sales finance operations in the U.S.

Mitsubishi Motors posted an ordinary profit of 16.2 billion yen – a gain of 13.6 billion yen over last year -- due to the improvement in operating profit, an upturn in the balance of interest received and paid, and increased gains on foreign exchange transactions.

Mitsubishi Motors reported a net profit of 10.3 billion yen for the period, a year-on-year improvement of 18.5 billion yen. This improvement was due to the upturn in ordinary profit and to the lack of one-time reorganization costs stemming from the regional integration of its domestic consolidated sales companies booked in fiscal 2007.

Sales volume

Global retail sales volume in the first quarter of fiscal 2008 totalled 314,000 vehicles, a 7 percent decrease of 24,000 on the 338,000 sold in the same period in fiscal 2007.

In Japan, where demand remains at the same level as last year, MMC sold 39,000 vehicles, a 15 percent drop of 7,000 over the same period last year. This decline was due to slower sales of SUV models as more customers switched to smaller cars, and to the company’s cutback in low-margin minicar trading.

In North America the company sold 37,000 vehicles, a 23 percent decrease of 11,000 over the same period in 2007. Higher sales volume in Canada and Mexico failed to offset the significant drop in sales of locally built models in the U.S., despite firm sales of the new Lancer.

In Europe Mitsubishi Motors sold 92,000 vehicles, a 14 percent increase of 12,000. This was driven by continuing growth in unit sales in Russia, the Ukraine and the countries of Central Europe which offset a lower sales volume in West Europe.

In Asia and other regions, MMC sold 146,000 vehicles, an 11 percent decrease of 18,000 over the same period last year. This was the result of lower sales of production parts for local assembly in China and at Proton in Malaysia outweighing robust sales in Brazil, Indonesia and The Philippines.

FY2008 full-year forecasts

Mitsubishi Motors leaves the fiscal 2008 first-half and full-year consolidated forecasts announced on April 25, 2007 unchanged.