Shares of Hino Motors, a Japanese truck maker, dropped significantly on Friday morning following the company’s announcement of a first-quarter net loss. The loss was primarily attributed to a special loss related to engine data falsification.
Net Loss and Share Price Impact
Hino Motors revealed that it incurred a net loss of Y16.52 billion ($118.4 million) for the quarter ended June 30, contrasting with a net profit of Y723 million in the same period last year. Consequently, the company’s shares plunged by 10% to 566.2 yen and had earlier witnessed an 11% downturn.
Special Loss and Suspended Sales in Japan
In response to the engine data falsification issue, Hino Motors allocated a special loss of Y13.06 billion to compensate for the losses suffered by its suppliers and clients. This loss was connected to the suspension of sales in Japan for vehicles equipped with certain engines.
Factors Impacting Earnings
Hino Motors not only had to contend with the negative consequences of engine data falsification but also faced challenges in terms of lower overseas sales volumes and increased material costs. Nonetheless, first-quarter revenue saw a 4.5% growth, amounting to Y371.91 billion. This increase was partially attributed to a weaker yen and the resumption of sales for select models in Japan.
Despite the first-quarter setback, Hino Motors maintained its earnings forecasts for the fiscal year ending March 2024. The company anticipates a 13% revenue growth to reach Y1.700 trillion. Furthermore, it aims to reverse the previous fiscal year’s net loss and achieve a net profit of Y10.00 billion.