AFP, TOKYO: Toyota yesterday warned that its annual net profit will fall by about a third as a stronger yen, and a slowdown in Chinese growth and other emerging markets dent its bottom line.
The surprise new forecast—which would mark Toyota’s first profit decline in five years—tipped a 1.5 trillion yen ($13.8 billion) net profit for the year to March 2017.
That is down 35 per cent from a record 2.31 trillion yen net profit that the world’s biggest automaker also reported Wednesday for its recently ended business year.
Sales this year will also be down nearly seven percent, although the automaker expects to sell more cars globally. The new outlook—which does not include the impact of plant shutdowns linked to Japan’s deadly earthquakes last month—underscores the negative impact that a resurgent yen is having on Japanese firms doing a lot of business abroad.
“Our earnings over the past several years have been boosted by (favourable) exchange rates,” said Toyota president Akio Toyoda.
“But we recognise that this trend has changed significantly.” The yen has weakened sharply since late 2012 when Prime Minister Shinzo Abe swept to power on a pledge to kickstart Japan’s lumbering economy.
That was good for firms such as Toyota and rivals Honda and Nissan—both report results this week—because repatriated foreign profits were worth more when the yen was weak.
But the unit has rallied in recent months as volatile equity markets driven by fears about the global economy pushed investors into a currency seen as a safe bet.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.
Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.