Mitsubishi Heavy Books $1.8 Billion Loss on Mitsubishi Motorsby
Company raises average yen forecast to 105 from 110 vs dollar
IHI, Mitsubishi cut profit forecast on stronger yen prediction
Mitsubishi Heavy Industries Ltd., the second-biggest shareholder in Mitsubishi Motors Corp., booked a 188 billion yen ($1.8 billion) loss on its stake in the carmaker after a fuel-economy test scandal led to a plunge in the shares.
Shares of the company dropped the most in a month after it cut its profit and sales forecasts for the year, citing the investment loss and a stronger yen. It reported a net loss of 12.1 billion yen in the three months ended June, compared with a profit of 35.5 billion yen in the year earlier period, according to a statement in Tokyo Friday. Sales fell 9 percent to 847 billion yen.
The maker of power plant equipment, aircraft and ships, which has pledged to maintain its stake in the carmaker, will stop outsourcing executives to the company after Nissan Motor Co. agreed to buy 34 percent of the automaker and become the lead shareholder, said Kentaro Ikeda, a manager in the managerial accounting group. Mitsubishi Motors shares have tumbled 53 percent this year.
Tokyo-based Mitsubishi Heavy lowered its net income outlook to 100 billion yen for the fiscal year ending March 31, from 130 billion yen, after accounting for the investment loss and the impacts of a stronger yen, it said Friday. It raised its forecast for the average yen-dollar rate this fiscal year to 105 yen from 110 yen.
Shares slumped 4.1 percent, the biggest loss since the U.K.’s vote to leave the European Union on June 24, to 443.1 yen in Tokyo on Friday.
IHI Corp., a Japanese maker of engines, bridges and ships, also cut its earnings forecasts today as it predicted a stronger yen against the dollar for the fiscal year.
The company cut its net income target 27 percent to 22 billion yen for the year ending March 31, it said in a statement Friday. Sales will probably be 1.52 trillion yen for the period, compared with an earlier forecast of 1.6 trillion yen, it said.
IHI also predicts the yen will average 105 against the dollar this fiscal year, compared with an earlier prediction of 110 yen, it said in a statement Friday.
Kawasaki Heavy Industries Ltd., the Japanese maker of New York City subway trains, kept its full-year sales and net income forecasts unchanged, while booking an 11.4 billion yen foreign exchange charge for the three months ended June 30, it said in a statement Friday. The company predicts the yen will average 110 against the dollar this fiscal year.