Japanese auto giant Toyota yesterday said that its first quarter net profit rose thanks to solid sales and cost-cutting efforts, but it revised down full-year profit partly due to a stronger yen.
The maker of the Camry sedan and Prius hybrid reported net profit of ￥683 billion (US$6.4 billion) in the April-to-June period, up 3.9 percent from a year before.
The company forecast full-year net profit would rise 14.2 percent to ￥2.15 billion, down from the previous forecast of ￥2.25 billion.
Photo: Bloomberg
It cited a stronger yen, but Toyota executive vice president Moritaka Yoshida said that foreign exchange was not the only issue.
“It’s not just about foreign exchange but because of the whole environment,” he said.
“Competition is expected to be very fierce,” he said, adding that the automaker could not afford to be “complacent.”
Toyota said that its operating profit climbed 8.7 percent to ￥742 billion, citing efforts to lower raw material costs, a strong sales push and a weaker yen against the US dollar during the period.
Sales grew 3.8 percent to ￥7.64 trillion.
Its group sales units expanded to 2.7 million in the first quarter from 2.6 million the previous year, Toyota said.
“Toyota is displaying a firm performance compared to its domestic rivals, as the auto industry is facing tough business conditions,” said Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm.
“A potential risk is the impact of the US-China trade war. A foreign exchange loss is also among its concerns,” he told reporters before the earnings were announced.
The business environment for companies such as Toyota has also been clouded by the US-China trade dispute and continued uncertainty from Brexit.
Yoshida said the company would continue to keep its eyes on “the potential impact on [its] businesses.”
“We want to continue to produce more vehicles locally, and this could be a countermeasure” to the potential effects of the US-China trade dispute, he added.
Toyota executives have said previously there would be no way to avoid a negative impact in the event of a no-deal Brexit.
Its assembly plant in Burnaston in central England, which produces 600 vehicles per day, would be affected.
The plant 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.
Toyota shares were down 2.83 percent before the lunch break, but trimmed the losses in the afternoon session after the results were announced.
Toyota’s crisis-hit rival Nissan Motor Co reported last month a plunge in quarterly net profit as it struggles with weak sales and fallout from the arrest of its former chief. It also announced 12,500 job cuts.
Nissan’s bottom line profit dropped to ￥6.4 billion for the three months to June.
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