Fri, Nov 08, 2019 - Page 10 News List

Toyota reports record first-half net profit, sales

COST-CUTTING:The automaker said factors including cost reductions and marketing helped outweigh negative effects from foreign-exchange rates in the first six months

AFP, TOKYO

Toyota Motor Corp chief operating officer Kenta Kon speaks to the media following a news conference in Tokyo, Japan, yesterday.

Photo: Bloomberg

Japanese automaker Toyota Motor Corp yesterday reported record net profit and sales for the first half of the year, with cost-cutting efforts helping to boost its balance sheet.

The maker of the Camry sedan and Prius hybrid reported that net profit rose 2.6 percent to ¥1.27 trillion (US$11.65 billion) in the April-to-September period.

The company kept its full-year net profit forecast at ¥2.15 trillion and operating profit at ¥2.4 trillion on sales of ¥29.5 trillion, although it made a minor change to its forecast for pre-tax profit.

Factors including cost reductions and marketing helped outweigh negative effects from foreign-exchange rates, contributing to an 11.3 percent rise in operating profit, or ¥1.4 trillion for the six months to September, Toyota said in a statement.

“As a result of our work to improve ourselves, many of our customers chose Toyota vehicles. The latest results show that,” Toyota executive vice president Mitsuru Kawai told a news conference. “We are grateful.”

“We have acted swiftly to change our business model, create alliances and make investments for the future,” chief operating officer Kenta Kon said.

He cited “healthy” sales of new models, including the Rav 4, and strong profits in Japan and North America, thanks to vigorous sales efforts, cost cutting and effective use of incentives for US buyers.

The firm assumed foreign-exchange rates at ¥107 to the US dollar for the current year to March, compared with ¥106 to the US dollar in the previous estimate.

It also announced that it would buy up to 34 million of its own stock, or 1.19 percent of its outstanding shares, for up to ¥200 billion by the end of the current business year.

However, US President Donald Trump’s administration has threatened to impose tariffs on Japanese vehicles imported to the US market.

The business environment for companies like Toyota has also been clouded by continued uncertainty from Brexit.

Toyota executives have previously said that there would be no way to avoid a negative impact in the event that Britain leaves the EU without a deal.

Its assembly plant in Burnaston, England, which produces 600 vehicles per day, operates under the company’s famous “just in time” system, holding limited stock on site and relying on flexible imports of millions of component vehicle parts from the EU.

Kon said that the risks posed by a no-deal Brexit have thus far been avoided.

“At this point it was avoided ... but had it happened, its impact would be significant,” Kon said.

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