Toyota Motor logs first annual profit fall in five years
TOKYO: Toyota on Wednesday reported its first drop in annual net profit for five years, while the Japanese car giant unexpectedly warned that the cost of customer incentives and a further pickup in the yen threatened to dig further into its bottom line.
The downbeat forecast underscores how Japan’s automakers, including rivals Nissan and Honda, have benefited heavily from a slump in the currency in recent years.
But sharp yen gains at the start of the past fiscal year — largely driven by Brexit and tumbling world equity markets — took a bite out of Toyota’s latest results.
The Corolla and Prius hybrid maker warned it expected more currency pain this business year, while incentives in the lucrative American market pushed operating profit in the region down about 35 per cent.
Overall, Toyota posted a net profit of 1.83 trillion yen ($16 billion) on slightly lower revenue of 27.6 trillion yen in the recently ended year to March — more than 20 per cent down from a record 2.31 trillion yen net profit the previous year.
Toyota, which lost its crown last year to Volkswagen as the world’s topselling automaker, warned it expects a net profit of 1.5 trillion yen in the current year to March 2018 — way off market expectations of around 1.9 trillion yen.
Vehicle sales in the past fiscal year ticked up to 10.25 million units from 10.09 million a year earlier.
Unit sales in the key North American market remained flat, while Toyota registered a pick-up in Europe, Japan and the rest of Asia.
“Japan’s auto sector saw ups and downs in its earnings as the yen fluctuated during the fiscal year — foreign exchange will continue to be a major factor for the industry,” said Satoru Takada, a Tokyo-based analyst at research firm TWi. — AFP