Toyota Maintains Annual Performance Outlook... "Significant Changes in Management Environment Including Exchange Rates and Interest Rates"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japanese automaker Toyota Motor Corporation announced that despite the weak yen effect, it will maintain its net profit guidance for the 2022 fiscal year (April this year to March next year) amid semiconductor and other parts shortages and supply chain disruptions.

According to Nihon Keizai Shimbun and Bloomberg News, Toyota reported that its consolidated net profit for April to September 2022 decreased by 23% year-on-year to 1.171 trillion yen (approximately 112 trillion KRW). This figure was below market expectations of 1.4491 trillion yen.

During the same period, sales increased by 14% to 17.7093 trillion yen, while operating profit fell by 35% to 1.1414 trillion yen.

Japan uses the fiscal year system to announce earnings. The fiscal year starts every April and ends in March of the following year. Toyota decided to maintain its existing guidance that the expected net profit for the 2022 fiscal year, from April this year to March next year, will decrease by 17% compared to the previous year to 2.36 trillion yen. However, the new car production target for this year was lowered from 9.7 million units to 9.2 million units.

Bloomberg reported, "The weak yen helps Japanese automakers improve the competitiveness of overseas sales vehicles and profitability domestically. However, the weak yen phenomenon actually increases the cost of raw materials and energy imports, so the benefits from the weak yen are not as significant as before."

Masahiro Yamamoto, Toyota's Chief Financial Officer, explained, "The business environment is undergoing significant changes due to rapid exchange rate fluctuations, rising interest rates, and increasing raw material prices. Although sales decreased in developed countries due to production constraints (from April to September), Asia and other regions recovered from COVID-19 and saw increases."

Meanwhile, Toyota announced on the same day that it will repurchase its own shares worth 150 billion yen.

This content was produced with the assistance of AI translation services.