Honda Reports 65.7% Jump in First-Half Profit

Honda Motor Co. reported a 65.7% year-over-year increase in attributable net profit for the first half of fiscal year 2027, reaching ¥516.7 billion, as revenue growth and exchange rate effects boosted performance. The results, reported in the company’s interim report filed March 31st, show a significant recovery in profitability despite ongoing headwinds in the automotive sector.

Consolidated revenue rose 13.2% to ¥12.376 trillion, driven by increased sales across all business segments and a positive impact from currency exchange rates. Operating profit increased by 48.1% to ¥648.7 billion, despite losses related to electric vehicle (EV) development. The company noted that gains from sales volume, reduced expenses, and exchange rate fluctuations offset the impact of EV-related losses.

The increase in profitability was unevenly distributed across Honda’s business segments. While the four-wheel drive segment experienced an operating loss, this loss was significantly reduced compared to the prior year, down ¥672 billion to ¥57 billion, cushioned by sales impacts and favorable currency exchange rates. The financial services business demonstrated strong growth, with operating profit up 47.3% to ¥210.9 billion, fueled by increased revenue from lease vehicle sales. Power Products and Other Businesses also saw a 47 billion yen increase in operating profit, to ¥44 billion, though the aerospace division within that segment continued to report losses.

Cash flow from operating activities increased by ¥2.669 billion to ¥6.328 billion, largely due to increased cash collection from customers and reduced payments for operating leases. The company’s cash and cash equivalents increased by ¥3.853 billion to ¥5.5038 trillion. Honda continues to invest heavily in research and development, with expenses totaling ¥4.955 billion for the interim period. The auto manufacturer also completed an additional purchase of Astemo Corporation shares, making it a consolidated subsidiary.

These results come amid a challenging environment for automotive manufacturers in India, where fluctuating commodity costs and increased litigation are impacting profitability. Despite these broader pressures, Honda’s revenue and profit growth demonstrate a positive trajectory, driven by increased sales and improved operational efficiency. The company’s ability to mitigate the impact of EV-related losses and capitalize on favorable exchange rates positions it for continued growth in the coming periods.