Mazda returns to profitability; N.A. remains in red

TOKYO -- Mazda Motor Corp. rebounded to its first annual net profit in five years, the company said today.

Amid the good news, the company's North American operations posted yet another loss, but Mazda CEO Takashi Yamanouchi said the red ink in North America should end this fiscal year.

Mazda swung to a global net profit of 34.3 billion yen ($364.3 million), in the fiscal year ended March 31, after four years of losses, including a loss of $1.14 billion a year earlier.

On an operating basis, Mazda swung to a $572.8 million profit from a year-earlier loss of $411.2 million, as revenue rose 8 percent to $23.42 billion.

Results were dragged down by losses at Mazda's U.S. operations, which bought out more than 100 workers last year to cut costs.

Wider N.A. losses

The regional operating loss for North America widened to $519.1 million, from $427.8 million the year before, even as all other regions remained in the black or expanded profits.

Yamanouchi said restructuring and the yen's recent decline against the dollar will return the region to profitability.

"This major loss will not occur" in the current year, Yamanouchi said.

Sales in North America flat-lined for the year at 372,000 units. U.S. sales gained 2 percent to 273,000 vehicles, partly due to the debut the CX-5 crossover with a 2.5-liter engine.

Sales in North America and the United States each fell short of the company's forecast made in February. Mazda had predicted North American sales would total 380,000 units, while U.S. sales would come to 280,000.

Forecast: more N.A., European sales

Mazda now predicts North American sales will climb 11 percent to 415,000 in the current fiscal year ending March 31, 2014. They are expected to get a boost from the full-year impact of the redesigned Mazda6 sedan and the debut of the latest Mazda3.

In Europe, operating profits in the fiscal year just ended tumbled 45 percent to $33.2 million, as revenue fell 2 percent to $3.77 billion. Unit sales fell 6 percent to roughly 172,000.

In the fiscal year that began April 1, Mazda predicts European sales will climb 17 percent to 200,000.

For the current fiscal year, Mazda predicts a doubling of global net and operating profit.

Yen, products to help

Earnings are expected to surge this year in the wake of the yen's decline against the dollar, which has aided the profitability of Japanese exports, and as Mazda rolls out more vehicles equipped with its line of Skyactiv engine, transmission and chassis technologies.

Net profit is expected to climb to $743.4 million, and operating profit to $1.27 billion. Revenue is forecast to rise 13 percent to $26.33 billion, as global unit sales climb 8 percent to 1.34 million vehicles, from 1.24 million last year.

Yamanouchi said the results put Mazda on course to reach the mid-term goals he set last year: To achieve global sales of 1.7 million vehicles in the fiscal year ending March 31, 2016, and to book operating profit of 150 billion yen ($1.59 billion) in that time frame.