Yamaha Motor's net sales for the first half-year ended September 30, 2004 increased 13.6 percent from the same period of the previous year, to 602.4 billion yen.
Operating income rose 18.8 percent, to 44.3 billion yen. Recurring profit climbed 21.2 percent, to 43.9 billion yen. Net income grew 21.8 percent, to 23.4 billion yen. Thus, the Company broke its interim records both for sales and profits. These figures also far exceeded the targets established at the beginning of the fiscal year: net sales rose by 9.3 percent, operating income by 30.3 percent, recurring profit by 29.1 percent, and net income by 29.8 percent over target levels.
Due to this favorable performance, interest-bearing debt was reduced to 93.4 billion yen, while the equity ratio rose to 37.9 percent, thus further strengthening the Company's financial position. On the exchange rate front, the yen appreciated by 11 yen from the same period of the previous year, although this still represented a 3 yen depreciation from the planned target, to 108 yen against the U.S. dollar. Meanwhile, the yen depreciated by 4 yen compared to both the same period of the previous year and the planned target, to 132 yen against the euro.
The sales growth was attributable to increased sales in all key business segments, including the motorcycle, marine product, power product, and IM (industrial robot) businesses. In terms of market segment, sales also expanded in all major regions, including Japan, North America, Europe, and Asia. Accordingly, the Company increased interim sales for the sixth consecutive year.
Broken down by business segment, motorcycle sales rose 15.2 percent from the same period of the previous year, to 326.3 billion yen. This gain principally resulted from sales expansion in Europe, where big bikes such as the YZF-R1 and FZ6 sold well, and Asia, where small four-stroke models enjoyed brisk demand, although sales declined in Japan and North America. Sales of marine products climbed 4.6 percent from the same period of the previous year, to 115.4 billion yen, due to the continued expansion of sales overseas, where outboard motors are mainstay products. Power product sales rose 8.5 percent, to 97.6 billion yen, reflecting sales growth for mainstay all-terrain vehicles worldwide. Sales in the "other products" segment increased 35.8 percent, to 63.1 billion yen, led by a substantial sales expansion for surface mounters in the mainstay IM business, centering in China.
By market, sales in Asia soared 37.7 percent from the same period of the previous year, to 124.3 billion yen; sales in Europe also rose significantly, by 23.8 percent, to 174.0 billion yen; sales in Japan increased 3.1 percent, to 81.9 billion yen; sales in North America remained almost on a par with the same period of the previous year, while sales in other areas climbed 2.0 percent, to 44.5 billion yen.
In terms of profits, operating income, recurring profit and net income registered record highs for the interim period. The gains were mainly attributable to increased profit amounting to 32.3 billion yen from expanded sales of products with higher profit margins, and cost reductions totaling 4.1 billion yen, among other positive factors, although there were factors that negatively impacted profits, such as an increase in selling, general and administrative expenses amounting to 20.0 billion yen, and a loss of 9.4 billion yen resulting from foreign currency translations. This favorable profit performance demonstrates that the Company has achieved the goal set in its medium-term management plan - establishing a solid structure capable of increasing profits, irrespective of the negative impact arising from exchange rate fluctuations.
During the period, the Company changed the status of Yamaha Motor Vietnam Co., Ltd. from a company accounted for by the equity method to a consolidated subsidiary. Due to this and other factors, the number of consolidated subsidiaries stood at 97, remaining the same as at the previous fiscal year-end, while the number of affiliates accounted for by the equity method was 45, an increase of four from the previous fiscal year-end.
The fiscal year ending December 31, 2004 will become an irregular nine-month accounting period, due to a change in the Company's closing date from March 31 to December 31. Accordingly, the Company's consolidated subsidiaries in Europe and Asia will adopt a regular twelve-month accounting period, while Yamaha Motor Co., Ltd. and its consolidated subsidiaries in Japan and North America will adopt an irregular nine-month accounting period.
Based on the steady progress toward resolving all NEXT 50 medium-term management issues, the Company has raised its forecast for net sales up by 6.5 percent, to 980 billion yen; both operating income and recurring profit up by 22.8 percent, to 70 billion yen; and net income up by 30.0 percent, to 39 billion yen, from the targets planned at the beginning of the fiscal year.
These business forecasts are based on the assumption that one U.S. dollar will trade at 109 yen over the period (a 4 yen depreciation from the planned target, and that one euro will equal 132 yen (a 4 yen depreciation).