TOKYO -- Mitsubishi Motors Corp. reported a 14 percent increase in operating profit in the latest fiscal year as rising sales and cost controls offset foreign currency exchange losses.
Mitsubishi’s operating profit climbed to 111.82 billion yen ($1.01 billion) in the full fiscal year ended March 31, the Japanese automaker said Thursday in its annual earnings report.
Net income grew 24 percent, to 132.87 billion yen ($1.20 billion) in the 12 months.
Revenue increased 15 percent to 2.51 trillion yen ($22.65 billion), as worldwide retail sales increased 13 percent to 1.24 million units, gaining ground in all major markets.
North American regional operating profit more than tripled to 3.5 billion yen ($31.6 million) in the 12 months to March 31, on a 12 percent increase in sales to 173,000 million units.
European sales climbed 25 percent to 236,000 vehicles in the fiscal year, but the region slumped to an operating loss of 4.3 billion yen from a profit of 10.7 billion yen ($96.6 million) a year earlier.
Mitsubishi forecasted that operating profit will decline 19 percent in the current fiscal year ending March 31, 2020, while net income will drop 51 percent.
Net income will drop more dramatically when compared to results that were bolstered in the just-ended fiscal year by a windfall U.S. income tax gain, the company said.
Results will also be hit by unfavorable foreign exchange rates and rising r&d outlays.
The outlook calls for global sales to increase 5 percent to 1.31 million vehicles. Mitsubishi predicted that North American sales will decline to 169,000 vehicles in the current fiscal year.
Focus on profits
In announcing the results and forecast, CEO Osamu Masuko said the company would pause its ambitious expansion plans to regroup and focus on profitability.
Dubbing the new strategy “small but beautiful,” Masuko said he wanted to position Mitsubishi as a company that can deliver sustainable profits even if it is small.
He said that will entail narrowing Mitsubishi’s lineup and striking the right balance between investing in next-generation technologies and staying focused on the emerging markets.
Markets such as Southeast Asia, he noted, don't require fancy systems like electrification or autonomous driving but still deliver the lion’s share of Mitsubishi’s profits.
Separately, Masuko said his company had not discussed a possible management integration with Nissan Motor Co. and alliance partner Renault SA.
Speaking to reporters at the earnings briefing, Masuko also said he was not aware of such talks between Nissan and Renault.
A source told Reuters in late April that France's Renault would propose a plan to create a joint holding company that would give it and Japanese partner Nissan equal footing.
Reuters contributed to this report.