Japan’s Honda Motor Co. on Wednesday posted a better-than-expected 9% drop in first-quarter operating profit, squeezed by COVID-19 restrictions in China that curtailed production and higher material costs.

Operating profit for the three months ended June 30 fell to 222.2 billion yen ($1.65 billion), beating an average estimate of 200.2 billion yen in a poll of 10 analysts by Refinitiv.

In the same period a year earlier, Honda reported a 243.2 billion yen profit.

It raised its operating profit forecast to 830 billion yen from 810 billion yen for the year ending March 31.

Like other automakers, Honda’s production was hit by the global semiconductor shortage and China’s COVID-19 lockdowns that disrupted supplies of parts.

Honda was forced to slash production at domestic factories by as much as 50% at one point during the April-June quarter.

It had said production at those plants would return to normal in early June but then adjusted plans for August, hampered by logistical and supply chain snags.