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Toyota annual net profit falls 25% to 1.88t yen
JAPANESE car giant Toyota said Wednesday its annual net profit fell by a quarter despite record sales, blaming investment losses - but it forecast an upturn in the year ahead.
Toyota's bottom line for the past year was pushed down by some 294 billion yen (S$3.64 billion) in book losses on its investment portfolio. The maker of the Camry sedan and Prius hybrid said net profit was down 24.5 per cent from its best-ever result the year before at 1.88 trillion yen in the year to March 31.
The firm expects net profit to rise 19.5 per cent in the coming year to 2.25 trillion yen.
Senior managing officer Masayoshi Shirayanagi blamed "the deterioration of the stock market in the current period" for the investment losses. He added the figures suffered in comparison with previous year's 250-billion-yen boost from US tax reform.
Sales rose 2.9 per cent to a record 30.23 trillion yen, leaving an operating profit of 2.47 trillion yen, which was up 2.8 per cent year-on-year. According to local media, it was the first time a Japanese company had ever logged sales of over 30 trillion yen.
Toyota expects operating profit for the current year to March 2020 to increase 3.3 per cent to 2.55 trillion yen, and sales forecast to sag 0.7 per cent to 30 trillion yen.
"Toyota has cruised steadily, compared with its rivals," said analyst Satoru Takada at TIW, a Tokyo-based research and consulting firm. "The firm largely showed a reasonable performance around the world at a time when the global market is slowing down," he said.
Mr Takada was not so optimistic about the outlook of the car industry. Japanese carmakers have enjoyed a heyday in recent years with the North American market steadily recovering from the financial crisis of the late 2000s and China growing into a mammoth market, he noted.
"But the outlook for the two biggest markets is now murky, while material costs are rising," he said. "Also, they can't expect the one-time impact of US tax cuts, which temporarily boosted their profit before. Tough factors outnumbered positive ones," he told AFP.
The business environment for companies like Toyota has also been clouded by the US-China trade war and continued uncertainty from Brexit. Toyota executives have said previously there would be no way to avoid a negative impact in the event of a no-deal Brexit.
Its assembling plant in Burnaston in central England, which produces 600 vehicles per day, would be affected. The plant operates under Toyota's famous "just-in-time" system, holding limited stock on site and relying on flexible imports of millions of component car parts from the EU.
"If Britain finally leaves the EU, carmakers are likely to accelerate relocation talks. It is natural for them to move to a profitable place," Mr Takada said. AFP