Yamaha Motor Co., Ltd. (the "Company") announced its consolidated business results for the fiscal year ended December 31, 2007. Net sales increased 11.0 percent from the previous year, to 1,756.7 billion yen, operating income rose 2.8 percent, to 127.0 billion yen, and ordinary income climbed 11.9 percent, to 140.3 billion yen, all breaking records. However, net income decreased 7.8 percent, to 71.2 billion yen during the fiscal year under review, due to a special provision for an accrual for product liabilities.
Reflecting these results, the Company will propose increasing the annual cash dividends to be paid, for the sixth consecutive year -- to 41 yen per share of common stock -- at the Ordinary General Meeting of Shareholders.
On the foreign exchange front, the average purchasing value of the yen against the U.S. dollar during the fiscal year under review depreciated by three yen from the previous year, to 117 yen, and dropped by 15 yen against the euro, to 156 yen.
Broken down by business segment, motorcycle sales increased 15.5 percent from the previous fiscal year, exceeding one trillion yen for the first time in Company history at 1,056.2 billion yen, led principally by favorable sales in Indonesia, Vietnam and Brazil. Marine product sales rose 8.8 percent, to 289.9 billion yen, reflecting steady increases in personal watercraft sales in the United States and outboard motor sales in Europe. Power product sales climbed 6.1 percent, to 265.6 billion yen, due mainly to a significant sales increase in side-by-side vehicles in the United States, although all-terrain vehicle sales decreased there. Sales in the "other products" segment fell 3.5 percent, to 145.0 billion yen, reflecting a sales decline in the Intelligent Machinery business, which consists primarily of surface mounters and other industrial robots.
Meanwhile, operating income from the motorcycle business rose 15.4 percent from the previous year, to 63.0 billion yen. Operating income from the marine product business increased 21.6 percent, to 28.2 billion yen. Operating income from the power product business dropped 19.5 percent, to 22.2 billion yen. Operating income from the "other products" segment decreased 25.3 percent, 13.5 billion yen.
Negative factors affecting operating income include an increase in selling, general and administrative expenses totaling 52.8 billion yen from the previous year; the impact of a change in the product mix and related factors totaling 10.3 billion yen; an increase in research and development expenses totaling 7.5 billion yen; hikes in raw material prices totaling 4.9 billion yen; and an increase in depreciation expenses totaling 5.7 billion yen. However, these negative factors were more than offset by the positive impact of an increase in exchange translation totaling 40.2 billion yen; an increase in gross profit totaling 31.7 billion yen due to sales expansion; and cost reductions in procurement operations totaling 12.8 billion yen. As a result, total operating income for the fiscal year under review set a record for the seventh consecutive year.
In the fiscal year under review, the Company added Yamaha Motor Middle Europe B.V. to its group of consolidated subsidiaries. This and other changes increased the number of consolidated subsidiaries at the end of the fiscal year by three from the end of the previous year, to 111, while the number of companies accounted for by the equity method decreased by five, to 38.