Honda Motor Co., Ltd. reported a sharp decline in profitability for the fiscal year, posting a consolidated operating loss and net loss largely driven by heavy EV-related write-downs, changing market conditions, and tariff impacts.
Honda’s consolidated sales revenue rose slightly by 0.5 percent year-on-year to 21.8 trillion yen. However, the company recorded an operating loss of 414.3 billion yen compared with an operating profit of 1.21 trillion yen in the previous fiscal year. Net loss attributable to shareholders stood at 423.9 billion yen, reversing last year’s profit of 835.8 billion yen.
The automaker said the losses were primarily linked to a major reassessment of its electric vehicle strategy, especially in North America and China. The company booked more than 1.45 trillion yen in EV-related losses and expenses, including impairment charges, canceled vehicle development projects, alliance-related compensation costs, and provisions tied to supply contracts.
Honda confirmed it canceled the launch and development of several EV models planned for North America and reduced production plans for certain jointly developed electric vehicles. The company cited slowing EV demand in the United States following changes in government incentives and easing of emissions regulations, along with intensifying competition in China’s EV market.
Despite the losses, Honda maintained strong cash generation. Net cash provided by operating activities surged to 1.13 trillion yen, while cash and cash equivalents increased to 5.12 trillion yen at the end of the fiscal year.
The motorcycle business remained a major strength for the company, with segment profit rising to 731.9 billion yen. In contrast, the automobile division posted a segment loss of 1.41 trillion yen due to the EV-related charges.
Toshihiro Mibe and the company leadership indicated that Honda is repositioning its electrification strategy to better align with evolving market conditions and profitability targets.
Looking ahead, Honda forecasts a return to profitability in fiscal year 2027. The company expects sales revenue to rise 6.2 percent to 23.15 trillion yen, with projected operating profit of 500 billion yen and net profit attributable to shareholders of 260 billion yen.
Honda said the recovery outlook is supported by reduced EV-related losses, improved sales performance, and operational adjustments, although currency fluctuations and tariff impacts are expected to remain challenges.
The company also maintained its annual dividend forecast at 70 yen per share for fiscal year 2027, signaling confidence in its medium-term financial recovery despite the current year’s losses.
