Toyota Q1 net profit down, cuts FY forecasts

[TOKYO] Toyota said Thursday its April-June net profit tumbled nearly 15 per cent on-year, hit by a sharp rally in the yen and falling North American sales, while it also trimmed full-year profit and sales forecasts.

The world's top automaker posted a 552.5 billion yen (S$7.27 billion) net profit in its fiscal first quarter, down from 646.4 billion yen in the same period last year, while revenue fell 5.7 per cent to 6.59 trillion yen.

The firm's latest results underscore the negative impact that a resurgent yen is having on Japanese firms doing a lot of business abroad.

Japan Inc has reaped windfall profits over the past few years as Tokyo's efforts to kickstart the world's number three economy sharply weakened the currency.

That was good for firms such as Toyota and rivals Honda and Nissan because repatriated foreign profits were worth more when the yen was weak and it made them more competitive overseas.

But the currency has rallied since the start of the year as volatile equity markets and Britain's vote to exit the European Union pushed investors into the unit, which is seen as a safe bet.

Toyota, which also reported a fall in quarterly operating profit, cited the yen as a reason for tweaking its forecast for the fiscal year to March 2017.

The company now expects net profit of 1.45 trillion yen on revenue of 26.0 trillion yen, compared with 1.5 trillion yen and 26.5 trillion yen previously forecast.

AFP