Suzuki Q4 op profit down 51pct, skips forecasts

Suzuki Motor Corp posted a 51 per cent drop in quarterly operating profit on Tuesday and, like its peers, did not provide forecasts for the new financial year amid uncertainty over the supply of parts and power.

Like the rest of the industry, Japan's fourth-largest automaker has been hit by a supply chain disruption since the earthquake and tsunami on March 11. But its huge exposure to the fast-growing Indian market, where virtually all parts are sourced locally, puts it in a better position than Toyota Motor Corp and Honda Motor Co, analysts said.

Suzuki operated at about 65 per cent of capacity in Japan last month, compared with about a third for Toyota. Its shares have also held up better, losing 3.9 per cent since the quake against a 9.6 per cent drop for Tokyo's transport sector subindex.

Suzuki's operating profit in January-March fell 51 per cent from a year earlier to ¥14.48 billion ($180 million), according to calculations by Reuters. That compared with an average estimate of ¥15.6bn from 14 analysts who updated their forecasts after the March 11 disaster, according to Thomson Reuters I/B/E/S.

Fourth-quarter net profit fell 81 per cent to ¥2.57bn while revenue dropped 1.4 per cent to ¥680.5bn. The consensus forecast from 14 analysts has Suzuki's operating profit falling to ¥81.3bn this business year, from the ¥106.93bn booked in the year that ended on March 31.

Suzuki's main earnings driver continues to be its biggest market, India, where the growth in car sales is slowing but still healthy at double-digit percentages.

Its subsidiary Maruti Suzuki India, however, warned last month that the outlook for profits was uncertain due to rising interest rates that could dampen consumer demand and higher commodity prices.

And fresh concerns about power shortages have surfaced after Chubu Electric Power said on Monday it would shut down its nuclear power plant, heeding a request by the government. Suzuki has all four of its domestic car and motorcycle plants in the utility's coverage area, in central Japan.

Prime Minister Naoto Kan last week called for the closure of Chubu's Hamaoka nuclear plant, citing the risk of another disastrous quake after the Fukushima Daiichi plant in northeast Japan was destroyed by the March 11 quake and tsunami.

Before the results, Suzuki shares closed up 0.2 per cent at yen.