Suzuki Motor Corp. revealed a 24% increase in profit in the first quarter, partially attributed to a one-time gain from selling shares of a General Motors Co. unit. Suzuki is 20%-owned by Volkswagen AG. Largely due to the disruption to its production as a result of the March 11 disaster in Japan, its operating profit dropped by 20%.
In the three months ended June 30, its net income amounted to 18.7 billion yen ($243 million) from 15.2 billion yen the previous year. Suzuki recorded a one- time gain of 8.3 billion yen from selling shares in a GM subsidiary and other securities.
Its revenue fell by 7.5% to 607.34 billion yen from reporting 656.28 billion yen last year. Suzuki and other Japanese automakers are on the path to recovery from the damage to the plants and interruption to the supply of parts, as well as power shortages.
The value of profits from exports dropped as the yen gained 11% against the dollar in the April-June quarter when compared to the previous year.
Executive Vice President Toshihiro Suzuki, son of chairman and president Osamu Suzuki, said that he is saddened that no one in Japan has done something about the strengthening currency.
He said that Suzuki is considering transferring production overseas if this continues. Suzuki admitted that he knows Volkswagen is rethinking the partnership but he said that he isn’t aware which aspects will be reviewed.
He said that as Volkswagen is currently in “summer vacation,” the two firms haven’t discussed any details. In the quarter, Suzuki had an operating profit of 25.6 billion yen while sales dropped 7.5% to 607.3 billion yen. Suzuki asserted that the strong yen reduced operating profit by 5.9 billion yen in the last three months.