Subaru H1 FY2027 profit rises 12.9% despite lower global sales – Weaker yen and cost cuts boost earnings

Subaru Corporation has reported higher revenue and profit for the first half of FY2027, covering the six months from April to September 2026. Despite a decline in global vehicle sales, the Japanese automaker benefited from favourable exchange rates, a stronger sales mix and lower warranty costs.

Financial results

Subaru's revenue rose 5.4% year on year to JPY 2,513.4 billion (approximately RM 75 billion), extending its record of first-half revenue growth to six consecutive years.

Operating profit increased 12.9% to JPY 116 billion (around RM 3.46 billion), while net profit attributable to owners of the parent also rose 12.9% to JPY 102.1 billion (approximately RM 3.04 billion).

Automotive business

Subaru's combined global unit sales fell 6.1% year on year, from 473,000 to 444,000 vehicles. However, the automotive business still recorded growth in both revenue and profit.

Revenue from the automotive business increased 4.8% to JPY 2,434.9 billion (approximately RM 72.6 billion). Segment profit rose 13.8% to JPY 110.7 billion (around RM 3.3 billion).

Sales by market

• Japan: Sales fell 3.8% to 50,000 units.
• North America: Sales declined 11.1% to 302,000 units amid competition in key segments and inventory adjustments. Subaru's US retail sales stood at 333,000 units.
• Canada: Sales increased 34.3% to 45,000 units.
• Europe: Sales recorded modest year-on-year growth.

What drove the profit increase?

Subaru's operating profit rose by ¥13.3 billion (approximately RM396 million). The company attributed the improvement to several factors:

• Favourable exchange rates: A weaker yen against the US dollar and euro boosted earnings. The average exchange rate during the first half was around JPY 159 to the US dollar.
• Lower costs and warranty expenses: Cost Innovation initiatives contributed JPY 11.1 billion (approximately RM 330 million) to profit. Lower warranty repair costs and related provisions provided a further positive impact of around JPY 25 billion (approximately RM 746 million).
• Deferred operating expenses: Some operating costs were pushed into the second half due to differences in timing, temporarily improving first-half profit by around JPY 14 billion (approximately RM 418 million).

Cash position and shareholder returns

As of the end of September 2026, Subaru held approximately JPY 959.3 billion (around RM 28.6 billion) in cash and cash equivalents. Operating cash flow remained healthy at JPY 207.7 billion (approximately RM 6.2 billion) for the first half.

The company expects to pay a total dividend of JPY 116 per share for FY2027, comprising an interim dividend of JPY 58 and a forecast year-end dividend of JPY 58.

Subaru is also progressing with a share buyback programme worth up to JPY 150 billion (approximately RM 4.48 billion). As of 31 October 2026, it had repurchased around JPY 67 billion (approximately RM 2 billion) worth of shares.

FY2027 full-year outlook

Subaru has kept its full-year forecast for the financial year ending March 2027 unchanged:

• Global production: 900,000 vehicles
• Consolidated global sales: 940,000 vehicles
• Revenue: JPY 5,200 billion (approximately RM 155 billion), up 8.7% year on year
• Operating profit: JPY 150 billion (approximately RM 4.48 billion), up 273.9% year on year

Despite lower vehicle sales in the first half, Subaru managed to improve its financial performance through favourable exchange rates, cost controls and lower warranty expenses. The company is maintaining its full-year targets as it looks to sustain its recovery in profitability.

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