Hero Honda net falls 2% to Rs 207.11 cr

BS 200 SCORECARD

Hero Honda Motors Ltd today announced that net profit for the quarter for the year 2004-05 fell by two per cent to 207.11 crore, against Rs 211.30 crore net profit for the same period last year.

Despite a 15 per cent increase in the topline for the fourth quarter, rising input costs (like steel) put pressure on the company net profit and operating margins. Operating margin for the whole year dropped by little over 100 basis points to 14.50 per cent during 2004-05.

The world's largest two-wheeler company, today announcing its financial results for the year 2004-05 said for the full year 2004-05 it has registered a turnover of Rs 7562.68 crore, against Rs 5997.47 crore in 2003-04, an increase of 26 per cent. Profit after tax for the whole year was Rs 810.47 crore, against Rs 728.32 crore in 2003-04, in increase of 11 per cent.

During 2004-05, Hero Honbikes against 2.07 million units in 2003-04, an increase of 26 per cent. The company's board has recommended a 1000 per cent dividend for the year ending March 31, 2005, involving a net outflow of a little less than Rs 60 crore.

Discussing the company's financial results, Hero Honda's management said that profits would continue to be under pressure, due to increasing inputs costs. The company had made an upward revision in the prices of some of its models during April 2005.

This, according to the Hero Honda was the first price increase in the last five years. The company's top management however refrained from forecasting the performance in the coming months.

Hero Honda's managing director, Pawan Munjal said that the rising fuel and inputs costs would not stop the company from launching new products in the market.

He also said that the location of the third plant would soon be announced. He however said that the current capacity would be sufficient to meet the demand for the next one year.

Plans for launching scooter on the Honda platform is expected to be announced in 2006, said Munjal.

The company's share in the motorcycle market rose to 50 per cent during 2004-05, against 48 per cent in the previous year.

The company's JV partner and collaborator Honda Motors is currently examining the scope of exporting components from its Indian JV. When this materialises, it will the company first major foray into the exports market.