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Mazda first quarter profit slips on strong yen, but global car sales climb
July 29, 2016 / 6:41 AM / a year ago

Mazda first quarter profit slips on strong yen, but global car sales climb

Mazda Motor Corp's open-top sports car "Roadster", also known as "MX-5" in overseas markets, is displayed at an unveiling in Tokyo May 20, 2015.Issei Kato/File Photo

TOKYO (Reuters) - Japanese automaker Mazda Motor Corp (7261.T) reported a 1.7 percent fall in operating profit during the first quarter, hurt by a sharply stronger yen, although it managed to log slight growth in global sales.

Operating profit at Japan's fifth-largest automaker by vehicle sales volumes came in 52.4 billion yen ($505 million), above an average estimate of 35.8 billion yen from nine analysts surveyed by Thomson Reuters I/B/E/S.

Growth in global vehicle sales was driven by increases in Europe, China, and other markets although sales were flat in the United States. Sales fell in Japan.

The automaker said it expected sales to maintain their pace of growth as it rolls out new models in the coming months, including an updated version of the Mazda3.

Mazda maintained its forecast for a 25 percent slide in full-year operating profit, as it expects to take a hit of around 81 billion yen due to currency volatility.

The yen surged 19 percent in the year to June due to disappointment with Japanese central bank's monetary policy and worries about slower global growth.

Mazda has assumed a rate of 110 yen to the U.S. dollar but the yen is currently trading even higher at 104 to the dollar.

The automaker is vulnerable to swings in the yen against the greenback and the euro in particular, given that North America accounts for roughly one-third of global sales, while it exports all vehicles sold in Europe, its second-largest market.

Reporting by Naomi Tajitsu; Editing by Edwina Gibbs

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