Toyota says profit falls on stronger yen

Toyota cars are seen on display at the Toyota of North Hollywood dealership in Los Angeles, California. Photo|afp

What you need to know:

  • Operating profit fell nearly 30 percent to 1.11 trillion yen, while revenue was off 7.2 percent at 13.07 trillion yen. However the Corolla and Prius hybrid maker boosted its full-year to March net profit forecast to 1.55 trillion yen from an earlier 1.45 trillion yen estimate. The newest figure is still way down from a record 2.31 trillion yen net profit in the most recently ended business year.

Tokyo. Toyota said yesterday its April-September net profit dived 25 per cent, hit by a sharp rally in the yen and another fall in North American sales, but it upgraded its full-year outlook. The world’s biggest automaker reported a net profit of 946.1 billion yen ($9.1 billion) in the first half of its fiscal year, down from 1.25 trillion yen in the same period in 2015.

Operating profit fell nearly 30 percent to 1.11 trillion yen, while revenue was off 7.2 percent at 13.07 trillion yen. However the Corolla and Prius hybrid maker boosted its full-year to March net profit forecast to 1.55 trillion yen from an earlier 1.45 trillion yen estimate. The newest figure is still way down from a record 2.31 trillion yen net profit in the most recently ended business year.

The decline in profits underscores the negative impact that a resurgent currency has had on firms doing much of their business abroad.

Japan’s exporters reaped windfall profits over the past few years as government efforts to kickstart the world’s number three economy sharply weakened the yen.

That was good for firms such as Toyota and rivals Honda and Nissan because repatriated foreign profits were worth more when the yen was weak and because it boosted their competitiveness overseas. But the currency has rallied since the start of the year as volatile equity markets and Britain’s vote to exit the EU boosted demand for a unit widely seen as a safe investment. (AFP)