Toyota Full-Year Profit Drops By A Quarter Despite Record Sales


Japanese car giant Toyota said today that 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 in book losses on its investment portfolio.

The maker of the Prius hybrid and Corolla said its profit was down 24.5% from its best-ever result the year before, at 1.88 trillion yen ($17 billion) in the year to March 31.

The firm forecast net profit to rise 19.5% 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 that the figures suffered in comparison with previous year’s 250-billion-yen boost from US tax reform.

Toyota said its sales rose 2.9% to a record 30.23 trillion yen, leaving an operating profit of 2.47 trillion yen, which was up 2.8% year-on-year.

According to local media, it was the first time a Japanese company had ever logged sales over 30 trillion yen.

Toyota expects operating profit for the current year to March 2020 will increase 3.3% to 2.55 trillion yen, but sales are forecast to sag 0.7% to 30 trillion yen.

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.

But the outlook for the two biggest markets is now murky, while material costs are rising, analysts said.

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 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 European Union (EU).

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