Hino: FY2019’s Earnings and Profits Decreased Due to ASEAN Economic Recession and COVID-19

In Hino’s consolidated financial statements for FY2019, sales fell 8.4% year on year to 1,815.6 billion JPY and operating profit fell 36.7% to 54.9 billion JPY, resulting in lower revenue and profit. One of the major factors was the decline in sales. To be specific, the economic recession in China due to the US-China conflict affected ASEAN, delaying the recovery of commercial vehicle demands there. What is more, the COVID-19 pandemic had a serious impact on its sales in the last 2 months of FY2019. As a result, the global sales fell 11.2% to 203,000 units.

As for the operating profit, the drop in sales resulted in a loss of 40 billion JPY, and the effects of foreign exchange and materials led to a loss of 12.6 billion JPY. Although cost reduction and cost fluctuations were positive factors resulting in a gain of 24.3 billion JPY, the operating profit fell 31.8 billion JPY year on year to 54.9 billion JPY.

Possible predictions are that sales of trucks in Japan will be affected from the second quarter due to the pandemic, and it will be worsened in the latter half of the fiscal year. Also, bus sales in Japan are expected to stay low throughout the year. In overseas, a sharp drop in sales is expected in the first half of the year but a slight recovery may occur in the latter half of the year even it would be still at the low level. Based on the aforementioned predictions, Hino aims to reach global sales of 150,000 units for FY2020. The company intends to build a strong business system that is resistant to external risk factors, to improve added values, and to minimize inventory and operational losses.