Mitsubishi Motors Corp (MMTOF) Q2 2024 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you very much for taking time out of your busy schedule to attend our first half earnings call. In addition to an increase in vehicle supply across the industry, intensifying competition, the delay in recovery of the macro economies mainly in Thailand and Indonesia have slowed down the demand for automobile. As a result, the sales environment surrounding us remains to be severe. As shown in this slide, our results for first half FY 2024 showed a decrease in both sales and profit on a year-on-year basis. The net sales were 1,307,400,000,000 yen, a drop by 2% year-on-year. The operating profit decreased 13% year-on-year to 90.7 billion yen, and the OP margin dropped 0.9 point year-on-year to 6.9%. The ordinary profit decreased 43% year-on-year to 69.2 billion yen, mainly due to the impact of Forex losses, and the net income after tax was 38 billion yen. The retail sales increased 5% year-on-year to 408,000 units. Please turn to page 4. In this slide, you can see the factors behind the year-on-year changes in operating profit for first half of 2024. In terms of volume mix and price, despite an increase in shipment to Japan, North America, and Australia, New Zealand, and other markets, shipments to Europe and the Middle East were controlled according to the plan, and inventory adjustment in ASEAN were accelerated. As a result, the operating profit decreased by ¥7.9 billion. Sales expenses pushed down the operating profit by ¥27.7 billion, mainly due to higher incentives in the U.S. and Thailand for intensified market conditions. Procurement cost shipping costs improved by ¥10.4 billion in total, despite an increase in material costs due to inflation and increase in plant expenses. and deterioration in transport costs from higher unit price of transportation as well...