Mitsubishi Motors (7211) Q2 2025 earnings summary

Executive summary

• First half of FY2024 saw a 2% year-over-year decline in net sales to ¥1,307.4 billion and a 13% drop in operating profit to ¥90.7 billion, with net income down 44% to ¥38.0 billion, amid intensified competition and slow macroeconomic recovery in Thailand and Indonesia.

• Retail sales volume increased 5% year-over-year to 408,000 units, driven by growth in North America, Japan, and ASEAN.

• Ordinary profit fell 43% year-over-year to ¥69.2 billion, mainly due to forex losses.

• FY2024 full-year forecast projects net sales of ¥2,880.0 billion (+3%), operating profit of ¥190.0 billion (–0.5%), and net income of ¥144.0 billion (–6.9%), with annual dividend forecast at ¥15 per share.

Financial highlights

• Operating profit margin for 1H FY2024 was 6.9%, down 0.9pp year-over-year.

• Operating profit was negatively impacted by higher sales expenses and increased R&D and general expenses, but partially offset by improved procurement, shipping costs, and positive forex effects.

• Free cash flow for 1H FY2024 was ¥5.1 billion, down from ¥8.2 billion in 1H FY2023.

• Capital expenditure rose 21% year-over-year to ¥35.1 billion; R&D expense increased 16% to ¥60.6 billion.

• Q2 saw operating profit improvement from ASEAN turnaround and increased shipments to Japan and North America, but higher incentives in the U.S. and inflationary pressures continued to weigh on margins.

Outlook and guidance

• Full-year 2024 performance forecast is maintained, with management emphasizing flexibility in response to ongoing market changes and uncertainties, including global political events and exchange rate fluctuations.

• FY2024 retail sales volume forecast raised to 895,000 units (+10% year-over-year), with growth expected in ASEAN, North America, and Latin America.

• Dividend per share forecast increased to ¥15 for FY2024.