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Mazda Reports Strong First Half Financial Results


- Operating Profit up 43 Percent Year-on-Year -
- Full-year outlook revised upwards in the final year of the Mazda Momentum plan -

- First-half consolidated sales revenue up 13 percent year-on-year to 1.52 trillion yen.
- Consolidated operating profit up 43 percent to 69.8 billion yen.
- Full-year operating profit outlook revised upwards to 148 billion yen.

HIROSHIMA, Japan--Mazda Motor Corporation today announced that its fiscal year 2006 full-year forecast was being revised upwards based on record levels of consolidated revenue, operating profit and ordinary profit that were reached in the first half of FY2006.

FY2006 First Half Results
Mazda’s consolidated revenue increased 13 percent in the April-September period to 1.52 trillion yen. In spite of a rapid rise in the cost of raw materials, consolidated operating profit rose 43 percent year-on-year to 69.8 billion yen, a 21 billion yen improvement, largely supported by an improved model mix and volume, favorable currency exchange rates and cost reductions. Ordinary profit increased by 31 percent to 56.6 billion yen compared to the same period last year. Net income was 27.2 billion yen, down 12 percent year-on-year, due to an extraordinary gain during the first half of the last fiscal year from the transfer of the substitutional portion of Mazda’s employee pension fund liabilities to the Japanese government. Excluding the one-time impact of the gain from the pension fund transfer and impairment losses, net income was up 18 percent.

On a geographic basis, despite steady micro-mini sales in Japan, Mazda’s sales volume during the first half of FY2006 declined by 7 percent to 131,000 units, mainly due to diminished demand for registered vehicles. In the US market, sales volumes increased 3 percent to 142,000 units, attributable to the newly-launched Mazda CX-7 and contributions from the Mazda5 and MX-5 models. Strong sales of the Mazda5 and MX-5 in Europe led to 151,000 units sold there during the April-September period, an increase of 10 percent year-on-year. Sales in China declined 8 percent to 62,000 units in the first half amid a very competitive sales environment. Overall, Mazda recorded 560,000 consolidated global wholesales for the first half of FY2006, up 1 percent over last year.

Full-year Profit Projections for FY2006 revised upwards
Mazda is now forecasting a rise of 3 percent in global wholesales to 1.18 million units in FY2006 following a downward revision since the last financial projections were released. Consolidated revenue is projected to increase by 8 percent year-on-year to 3.15 trillion yen, with full-year operating profit expected to rise 20 percent to 148 billion yen, and consolidated net income up 23 percent to 82 billion yen.

Mazda Senior Managing Executive Officer and Chief Financial Officer David E. Friedman said, “We are pleased to report a one percent increase in Mazda’s operating margins in the first half, to 4.6 percent, reflecting the impact of an improved model mix in markets around the globe. Although we anticipate an even more competitive operating environment in the second half, opportunities such as the launch of the Mazda CX-7 in Japan and the introduction of the CX-9 in North America will ensure our product-led growth continues on track as we execute the last phase of the Mazda Momentum plan.”

FY2006 Financial Projections:
Sales revenue: 3.15 trillion yen, up 230.2 billion (8 percent) on FY2005
Operating profit: 148.0 billion yen, up 24.6 billion yen (20 percent) on FY2005
Ordinary profit: 140.0 billion yen, up 38.5 billion yen (38 percent) on FY2005
Net income: 82.0 billion yen, up 15.3 billion yen (23 percent) on FY2005

Dollar/Euro Equivalent
FY2006 First Quarter Financial Results
Unit: millions

Yen | US$ | Euro
Revenue: 1,521,400 | 12,904.2 | 10,154.9
Operating profit: 69,800 | 592.0 | 465.9
Ordinary profit: 56,600 | 480.1 | 377.8
Net income: 27,200 | 230.7 | 181.6
Financial Results
- Dollar equivalents compiled at 117.90 yen to the dollar (Exchange rate prevailing on Sept.30, 2006).
- Euro equivalents compiled at 149.82 yen to the Euro (Exchange rate prevailing on Sept.30, 2006).

The projections for FY2006 and future outlook shown in this press release are based on various uncertainties including without limitation conditions of the world economy in the future, automotive industry trends and the risk of exchange rate fluctuations. Note that neither Mazda nor any third party providing information shall be responsible for any damage an individual may suffer due to investment in Mazda based on the information contained in this press release.


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