Mitsubishi 2006 Annual Report Download - page 53

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MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
쎱 North America
In North America, retail sales declined 18,000 units, 10.3% year on year, to 156,000 units. This decrease mainly re-
flected the impact of damage to the Mitsubishi brand caused by past over-ambitious sales strategies, problems related to
the launch timing for the new
Raider pickup truck, and ongoing efforts to reduce fleet sales as part of initiatives to
normalize sales activities. These factors were partially offset by a strong start by the all-new
Eclipse , a sporty coupe
launched in May 2005 in the U.S., and higher retail sales in Mexico and Puerto Rico.
Due to the above factors, as well as the termination of OEM sales contracts in fiscal year 2004, sales in North America
declined 5.8% to ¥415.7 billion. The operating loss improved ¥96.6 billion to ¥7.2 billion, however, due to lower depre-
ciation expenses resulting from the impairment charges booked in fiscal year 2004 and reductions in selling expenses such
as advertising costs.
쎱 Europe
In Europe, retail sales rose 26,000 units, 10.8% over fiscal year 2004, to 267,000 units, with growth coming from steady
sales in the large German and U.K. markets, as well as a substantial increase in sales in Russia.
Net sales decreased 12.2% to ¥586.2 billion, mainly due to a decline in OEM supply volume. However, operating
income rose ¥17.2 billion to ¥24.4 billion.
쎱 Asia and Other Regions
In Asia and other regions, retail sales decreased 7,000 units, a 1.0% drop from fiscal year 2004, to 664,000 units. The
main factors behind this decrease were declining retail sales in Malaysia, which is promoting increased production of
domestic automobiles, and Indonesia, where economic conditions were weak. Retail sales also declined slightly in North
Asia (China & Taiwan) and Oceania. These factors were partially offset by growth in retail sales in the Thai market, as well
as Central & South America, the Middle East, and Africa.
Net sales rose 2.3% to ¥614.1 billion, but operating income was ¥44.9 billion, down 31.0% from the previous fiscal year.
Financial Position
<Assets>
Total assets as of March 31, 2006 were ¥1,557.6 billion, down ¥31.7 billion from the end of fiscal year 2004.
Current assets were ¥842.3 billion, up ¥20.4 billion from a year earlier. Inventories rose ¥24.6 billion in conjunction
with the launch of new models, which along with other factors outweighed a decrease of ¥48.4 billion in cash and cash
equivalents mainly due to the repayment of borrowings.
Tangible fixed assets decreased ¥24.9 billion to ¥506.0 billion, due mainly to impairment losses booked in Japan, the
U.S. and Australia.
Investments and other assets declined ¥20.9 billion to ¥183.4 billion. This decrease mainly reflected a drop of ¥42.0
billion in residual interest in securitized assets.
<Liabilities>
Total liabilities as of March 31, 2006 were ¥1,276.3 billion, an increase of ¥22.0 billion from the end of fiscal year 2004.
Current liabilities increased ¥9.8 billion to ¥867.2 billion. The main contributing factor was an increase of ¥40.0
billion in trade notes and accounts payable in conjunction with the launch of new models.
Interest-bearing debt decreased ¥28.2 billion from the previous year to ¥447.8 billion. This decrease was mainly due to
the scheduled repayment of debt, which outweighed the issue of bonds by MMC’s Thailand-based subsidiary.
<Stockholders’ Equity>
Total stockholders’ equity decreased ¥56.1 billion to ¥268.7 billion due to the net loss of ¥92.2 billion for fiscal year
2005, which was partly offset by capital increases to strengthen equity. As a result, the equity ratio was 17.2%, a deterio-
ration of 3.2% from a year earlier.
Cash Flows
Looking at cash flows in fiscal year 2005, net cash provided by operating activities totaled ¥54.4 billion, ¥40.8 billion
more than in fiscal year 2004, mainly reflecting the year-on-year improvement in the net loss.
Net cash used in investing activities was ¥84.8 billion, ¥50.6 billion more than in the previous fiscal year, as payments
for purchases of tangible fixed assets exceeded proceeds from sales of these assets.
Net cash used in financing activities was ¥19.0 billion, compared with net cash of ¥133.6 billion provided by mainly
capital procurement activities in fiscal year 2004. This mainly reflected the repayment of short-term and long-term borrow-
ings, which exceeded proceeds from the issue of bonds and long-term debt.
As a result, the year-end balance of cash and cash equivalents was ¥248.1 billion, a decrease of ¥46.8 billion from the
beginning of the fiscal year.
Financial Results and Discussion