Japanese automaker Toyota Motor Corp yesterday posted a surge in net profit on record sales for the nine months to December last year, while also upgrading its full-year profit forecast.
However, the maker of the Camry sedan and Prius hybrid warned it was closely watching the impact of the 2019 novel coronavirus in China, where the firm has suspended operations at more than 10 plants.
Toyota said its net profit for April to December surged 41.4 percent year-on-year to ￥2 trillion (US$18.2 billion), while sales rose 1.6 percent to ￥22.8 trillion, the highest ever for the period.
The increase in profit was mainly due to strong revenue, cost-cutting efforts and gains in equity holdings.
By region, sales in North America — its cash cow — as well as Japan and Europe increased in the nine months, but those in Asia declined.
The company revised upward its full-year profit forecast to a net profit of ￥2.35 trillion for the fiscal year to March, compared with its earlier forecast of ￥2.15 trillion, thanks to foreign-exchange gains.
Operating profit is forecast at ￥2.5 trillion, up from ￥2.4 trillion forecast earlier, while its sales outlook remained unchanged at ￥29.5 trillion.
“Despite the industry’s tough business environment, Toyota is showing a steady performance compared with its rivals,” said Satoru Takada, analyst at research and consulting firm TIW Inc.
“Cost-cutting efforts continued contributing to Toyota’s profit,” offsetting the negative impact of a strong yen, Takada added.
Toyota operating officer Masayoshi Shirayanagi said at a news conference that the company was “paying close attention” to the impact of the coronavirus, warning its latest forecast revision did not take the outbreak into account.
“The impact of this new additional problem is really unclear at this stage,” Toyota executive vice president Didier Leroy said.
Toyota is keeping its 12 plants in China closed until at least Sunday over the coronavirus and any decision to extend the closure beyond that would be made after “assessing the situation,” a spokeswoman said.
“The coronavirus outbreak represents a material downside risk to our scenario for a mild recovery of the Chinese auto market in 2020,” S&P Global Ratings credit analyst Vittoria Ferraris said. “We estimate the current two-week production shutdown imposed in the Chinese province of Hubei will knock 2 percent to 4 percent off total annual production in the region.”
China could further extend shutdowns, possibly affecting up to one-half of China’s auto and auto-parts production, she said.
Takada also said that the outbreak could be “a potentially serious factor.”
“It can affect not only their production in China, but also customer sentiment,” he said, adding that other uncertain factors were the US-China trade dispute, the fragile situation in the Middle East and volatile crude oil prices.
Toyota shares, which were up about 2 percent before yesterday’s announcement, rose 2.57 percent to close at ￥7,914 in Tokyo trading.
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