Honda Motor Co., Ltd. Reports Consolidated Financial Results for the Fiscal Second Quarter and the First Half Ended September 30, 2003 TOKYO, Oct. 28 /PRNewswire-FirstCall/ -- Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal second quarter and the first half ended September 30, 2003. Second Quarter Results Honda's consolidated net income for the fiscal second quarter ended September 30, 2003 totaled JPY137.3 billion (USD 1,235 million), an increase of 57.6% from the corresponding period in 2002. Basic net income per Common Share for the quarter amounted to JPY 143.33 (USD 1.29), compared to JPY 89.54 for the same period in 2002. Two of Honda's American Depositary Shares represent one Common Share. Unit sales in all of Honda's business categories, namely motorcycles, automobiles and power products, increased during the fiscal second quarter and consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,017.2 billion (USD 18,132 million), an increase of 5.2% over the corresponding period in 2002. Revenue included currency translation effects, which had a negative impact on foreign currency denominated revenue from Honda's overseas subsidiaries translated into yen. Honda estimates that had the exchange rate of yen remained unchanged from the same period in 2002, revenue for the quarter would have increased by approximately 5.5%. Consolidated operating income for the fiscal second quarter totaled JPY 151.6 billion (USD 1,363 million), a decrease of 0.9% compared to the corresponding period in 2002. This decrease in operating income was primarily due to reduced revenue from decreased sales in Japan and an increase in research and development expenses, offsetting positive impacts, such as depreciation of the yen, ongoing cost reduction efforts and decrease in selling, general and administrative (SG&A) expenses. Consolidated income before income taxes for the quarter totaled JPY 183.8 billion (USD 1,653 million), an increase of 67.2% from the corresponding period in 2002. With respect to Honda's sales in the fiscal second quarter by business category, motorcycle unit sales increased by 8.7% to 2,218,000 units, and revenue decreased 5.1%, to JPY 233.5 billion (USD 2,099 million). Honda's unit sales of automobiles increased by 3.2% to 735,000 units, due to higher sales in North America and Asia. Revenue increased 6.9%, to JPY 1,646.2 billion (USD 14,798 million), during the quarter. Revenue from financial services increased 7.0% to JPY63.5 billion (USD 572 million). Unit sales of power products totaled 978,000 units, an increase of 10.5% compared to the corresponding period in 2002. Strong sales in North America and Europe were the major factor for this increase in unit sales. Revenue from power products and other businesses increased by 4.1% to JPY 76.8 billion (USD 691 million). First Half-Year Results Honda's consolidated net income for the first six months ended September 30, 2003 totaled JPY 239.1 billion (USD 2,150 million), an increase of 22.8% from the previous year. Basic income per Common Share for the fiscal first half amounted to JPY 249.34 (USD 2.24), compared to JPY 199.98 for the corresponding period a year ago. Consolidated net sales and other operating revenue for the six month period amounted to JPY 4,025.4 billion (USD 36,184 million), an increase of 4.5% from last year. Revenue included the negative effect of currency translation, and Honda estimates that if the exchange rate of the yen had not changed from the previous year, revenue for the year would have increased by approximately 6.9%. Consolidated operating income for the fiscal first half totaled JPY 301.8 billion (USD 2,713 million), a decrease of 6.8% compared to the corresponding period last year. This decrease in operating income was primarily due to negative impacts, such as appreciation of the yen, reduced revenue from decreased sales in Japan, an increase in selling, general and administrative (SG&A) expenses, which offset positive impacts, including Honda's cost reduction efforts. Consolidated income before income taxes for the fiscal first half totaled JPY 331.8 billion (USD 2,983 million), an increase of 21.3% compared to the previous year. With respect to Honda's sales for the fiscal first half by business category, motorcycle unit sales increased 9.1% to 4,219,000 units, due mainly to strong sales in Asia, however revenue decreased 4.6% to JPY 475.0 billion (USD 4,270 million). This decrease in revenue was due primarily to appreciation of the yen and a sales decrease in North America. Both Honda's unit sales and revenue related to automobiles for the fiscal first half increased by 2.6% to 1,443,000 units, and 5.7% to JPY 3,267.2 billion (USD 29,369 million), respectively. The major contributing factors to this increase in unit sales were strong sales of the Element and all-new Accord in North America and continued sales growth in Asia, which offset the negative impact from appreciation of the yen. Revenue from financial services increased 7.3% to JPY127.5 billion (USD 1,146 million). Unit sales of power products totaled 2,195,000 units, an increase of 9.4% compared to the previous year. Higher sales in North America were the major factor in this increase in unit sales. Revenue from power products and other businesses increased by 6.5% to JPY 162.5 billion (USD 1,461 million) due mainly to higher revenue from power products business. Forecasts for the fiscal year ending March 31, 2004 The U.S. economies, Japan and other regions are expected to recover slowly in the foreseeable future. Fears of a slowdown in the global economy and an impact of currency movement are anticipated to remain, and competition in the Japanese market is expected to intensify amid continuing weak consumer spending. Under such circumstances, in connection with its forecasts of the financial results for the fiscal year ending March 31, 2004, Honda projects the consolidated and unconsolidated results as below: FY2004 Forecasts for consolidated results In billions of yen Changes from FY 2003 Net sales and other operating revenue 8,220 +3.1% Income before income taxes 648 +6.3% Net income 470 +10.2% FY2004 Forecasts for unconsolidated results In billions of Yen Changes from FY2003 Net sales 3,310 -0.4% Ordinary profit 278 +14.6% Net income 202 +18.8% These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the current fiscal year will average JPY 115 and JPY 127, respectively. Honda projects that the year-end cash dividend will be JPY 19 per share of common stock. Total cash dividends for the term will be JPY 38. This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda's actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda's control. Such factors include general economic conditions in Honda's principal markets, foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in Honda's reports filed with the U.S. Securities and Exchange Commission. DATASOURCE: Honda Motor Co., Ltd. CONTACT: Tetsuo Oshima of Honda Motor Co., Ltd., +1-212-355-9191, ext. 16

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