Mitsubishi profit plunges after fuel economy scandal

Mitsubishi Motor Corp.'s operating profit plunged 94 percent in the latest fiscal year, broadsided by falling sales, foreign exchange losses and costs from a fuel economy scandal.

Operating profit sank to 5.1 billion yen ($45.8 million) in the Japanese carmaker’s fiscal full year ended March 31, from 138.4 billion yen ($1.24 billion) a year earlier.

The company also slumped to a net loss of 198.5 billion yen ($1.78 billion) in the 12 months, from net income of 72.6 billion yen ($652.5 million) the year before, Executive Vice President and Chief Financial Officer Koji Ikeya said while announcing financial results on Tuesday.

Revenue declined 16 percent to 1.91 trillion yen ($17.17 billion), as global retail sales fell 12 percent to 926,000 million vehicles in the fiscal full year.

Mitsubishi's operating profit was undercut by falling sales in every market except North America, where volume only inched ahead 2 percent to 138,000 vehicles for the year.

Foreign exchange rate losses lopped 77.5 billion yen ($696.6 million) off the company's full-year operating profit, as the yen appreciated against the U.S. dollar and other currencies.

The carmaker also took a charge of 36.0 billion yen ($323.6 million) in the fiscal year to cover costs associated with improper fuel economy testing of vehicles sold in Japan.

Mitsubishi admitted last year to cheating on fuel-economy ratings for several nameplates sold in Japan. The scandal torpedoed sales in the home market and opened the door for Nissan Motor Co. to take a controlling 34 percent stake in its smaller Japanese rival last autumn. Autonews

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