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Isuzu: FY2019 Financial Results First Decrease in 8 Years, Possibly Continued to FY2020
Isuzu’s FY2019 financial statements show that consolidated sales fell 3.2% to 2 trillion JPY and sales operational profit fell 20.5% to 140.6 billion JPY compared to FY2018. Isuzu has been increasing sales since FY2011, but sales of FY2019 decreased for the first time in 8 years. As sales in the main market of Asia fell in FY2019, Isuzu took emergency measures to reduce costs and secured profits. According to Isuzu, the impact of COVID-19 on FY2019 will be minor but will become serious after April 2020, predicting a sharp drop in demand for each country for FY2020.
A brief summary of FY2019 is that cost reduction brought a profit of 12 billion JPY while external factors such as a decline in domestic demands and foreign exchange rate fluctuations led to a loss of 37.2 billion JPY. As a result, its operating profit decreased by 36.2 billion JPY from the previous fiscal year.
Isuzu assumes that the demand recovery will begin during FY2020 as the logistic business continues. As for domestic, the company expects a fall in the 2nd quarter but predicts a sales recovery in the 4th quarter at the level decreased by 10% year on year. For overseas, it expects a recovery in the demand of mid-large sized vehicles after the 2nd quarter, and it will be likely to reach the profit which decreased by 10% year on year in the latter half. In Thailand, the company holds a positive prediction that the pickup truck market will recover to the level of the previous year in the 4th quarter. However, global sales are expected to decline, and sales of FY2020 will decrease by 18.3% to 1.7 trillion JPY and operating profit by 64.4% to 50 billion JPY.Note: The Japanese fiscal year is from April 1 to March 31.