Honda Motor (HMC.US) net profit increased 65.7% in the first half of the year, plans to expand production capacity in North America and Brazil

The Zhitong Finance App learned that Honda Motor (HMC.US) announced the results for the first half of fiscal year 2027 on November 10. Sales revenue from April to September was 12.04 trillion yen, up 13.2% year on year; operating profit was 648.7 billion yen, up 48.1% year on year, operating profit margin 5.4%; net profit to mother was 515.7 billion yen, up 65.7% year on year, with earnings per share 132 yen; adjusted operating profit after excluding EV-related losses was 1.1336 trillion yen, up 71.3% year on year.

Operating profit for the second quarter was 117.97 billion yen, down about 60% from the previous year, and the market estimate was 264.5 billion yen. The reason is that EV-related losses were centrally confirmed: all EV-related losses of 484.8 billion yen in the first half of the year were recorded in the second quarter, and zero in the first quarter. Revenue for the second quarter was 597.6 billion yen, up 12.9% year over year.

The motorcycle business remains a pillar of profit. Sales in the first half of the year were 11.9 million vehicles, up 10.6% year on year, reaching record highs during the same period. India and Brazil grew significantly; the sector's operating profit was 439 billion yen, up 19.2% year on year, and profit margin 19.3%. The automobile business was dragged down by a decline in sales in China, with sales volume of 1.569 million units in the first half of the year, down 6.6% from the previous year; however, demand for compact cars and hybrid models rose to 479 billion yen after sector adjustment, and profit margin rose from 2.2% to 6.2%. The operating profit after incorporating EV losses was 5.7 billion yen.

The full-year guidance was instead raised: sales revenue of 24.4 trillion yen, an increase of 250 billion yen; operating profit of 780 billion yen, an increase of 130 billion yen, or 20%; net profit to mother of 500 billion yen, an increase of 100 billion yen; and adjusted operating profit of 1.3 trillion yen. According to the guidelines, operating profit for the second half of the year was about 131.3 billion yen, and the company said that one-time profits such as tariff refunds for the first half of the year will not be recovered in the second half of the year.

The company also announced two production expansions: increasing North American automobile production capacity from 1.67 million to 1.91 million units in 2029 and building a new plant in Ohio, USA; and increasing motorcycle production capacity from 1.6 million to 2.3 million units in Manaus, Brazil. Operating cash flow for the first half of the year was 929 billion yen, free cash flow was 266.4 billion yen, compared to 760.6 billion yen for the same period last year; net cash at the end of the period was 3.404 trillion yen. The annual capital expenditure guidance was raised to 120 billion yen to 1.4 trillion yen.