Business

Honda sees sharp drop in profit

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Japan's third biggest carmaker, Honda, has announced a 41% drop in quarterly profit, as it continues to feel the impact of Japan's March disasters, the floods in Thailand, and the high yen.

Net profit for the third quarter fell to 47.6bn yen ($624m; £396m) from 81.1bn yen a year earlier.

Sales for the three-month period fell 8% to 1.94tn yen.

The company also slashed its annual forecast. It now expects a net profit of 215bn yen for the year to March.

In August it had estimated a profit of 230bn yen before withdrawing its guidance citing uncertainty due to the Thai floods.

Honda was the slowest carmaker to recover from the earthquake and tsunami in Japan in March 2011. It also has a factory in Thailand, which has been closed since October's floods. It is expects to resume production there at the end of March.

In 2011, Honda's global output dropped by a fifth to 2.9 million cars, slipping below 3 million for the first time in eight years.

The firm also said it was seeing a "negative currency effect" due to appreciation of the Japanese yen.

A strong currency hurts exporters as it makes their products more expensive for overseas buyers.

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