Honda Motor raised its full-year operating profit forecast by 20% to AED 18.1 billion, up from AED 15.1 billion. The company now expects net profit of AED 11.6 billion for the financial year ending March 2027, compared with its earlier estimate of AED 9.3 billion.
The upgrade comes despite a sharp fall in second-quarter earnings. Honda booked AED 11.25 billion in charges linked to the restructuring of its electric-vehicle business during the July–September period.
Operating profit for the quarter fell 39% year on year to AED 2.74 billion. This was well below the AED 5.8 billion median forecast from nine analysts surveyed by LSEG.
Honda said higher parts and materials costs, partly linked to the Iran war, and weak automobile sales in China also weighed on results. The company kept its full-year estimate for EV-restructuring costs unchanged at AED 12.07 billion.
Honda expects robust demand for hybrid vehicles in the United States to support earnings through the rest of the financial year. A weaker yen is also boosting the value of overseas earnings when converted into Japanese yen.
The company’s motorcycle business remains a major strength. Honda sold a record 11.9 million motorcycles in the first half of the financial year, up 10.6% year on year, with demand in India and Brazil driving growth. Honda reported a first-half net profit of AED 11.99 billion for the six months ended September. This represents a 66% increase from AED 7.24 billion in the same period a year earlier.
The charges underline the scale of Honda’s retreat from parts of its electric-vehicle strategy. The company is restructuring its EV business after earlier investments failed to deliver expected returns amid slower global EV adoption and intense competition.
Honda’s decision to maintain higher profit guidance signals confidence in hybrids, motorcycles and currency tailwinds. However, China remains a weak spot, and the EV restructuring will continue to pressure reported earnings in the near term.
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