Honda profit tumbles amid disasters

Japan\'s third-biggest automaker Honda on Monday said net profit for the fiscal first half plunged 77.4 percent year-on-year, as it grapples with the impact of the March earthquake and a strong yen. The automaker also held off giving an earnings forecast for the year ending March 2012 as it continued to assess the impact on its operations of Thailand\'s worst flooding in decades, which has forced it to halt production there. Analysts say the efforts of Japan\'s automakers to restore production in the wake of the March earthquake and tsunami, which damaged facilities and crippled supply chains, face being undermined by the impact of the Thai disaster. The maker of the Civic and Accord said vehicle shortages due to quake-related production problems pushed down sales in the United States and Japan. Honda said its net income in the first half ended September 30 totalled 92.2 billion yen ($1.17 billion), a decrease of 77.4 percent from the same time a year ago. Operating profit in the period plunged 81.1 percent to 75 billion yen, it said, due to lower sales and production, the impact of raw material price increases and the effects of a stronger yen. Revenue fell 22 percent to 3.6 trillion yen on lower automobile sales \"led by decreased production attributable to the impact of the earthquake and unfavourable foreign currency translation effects,\" the automaker said. A strong yen makes it harder for domestically made vehicles to be competitive overseas, while Japanese automakers\' overseas earnings are eroded when repatriated. Japan on Monday intervened in currency markets to weaken the unit after it touched a fresh record high against the US dollar, amid concerns that its strength could undermine the nation\'s fragile economic recovery. Meanwhile net profit in the second quarter ended September 30 fell 55.5 percent on-year to 60.4 billion yen. Honda in August raised its full-year net profit forecast to 230 billion yen from an earlier estimate of 195 billion yen, although that figure represented a 56.9 percent drop from its year-earlier profit. But on Monday the automaker declined to give an updated annual forecast. Thailand\'s worst flooding in decades has exposed the complexity of the global supply chain and a lack of components has forced Japan\'s automakers to halt or slow production in Asia and beyond. Honda has idled operations since early October at its four-wheel vehicle factory in Ayutthaya, central Thailand, as the factory remains submerged. Honda shares closed down 3.68 percent to 2,406 yen in Tokyo trade Monday.