Toyota Cuts Full-Year Earnings Forecasts On Stronger Yen

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TOKYO (Jiji Press) — Toyota Motor Corp. said Friday it has revised down its group earnings projections for fiscal 2019, due partly to the yen’s strength against other major currencies.

For the year to March 2020, Toyota now expects to log a net profit of ¥2.15 trillion, down from the earlier projection of ¥2.25 trillion, and an operating profit of ¥2.4 trillion, down from ¥2.55 trillion. Sales are projected at ¥29.5 trillion, down from ¥30 trillion.

On top of the higher yen, concerns about the global economy are on the rise amid the escalating U.S.-China trade tensions, casting a dark cloud over not only Toyota but also other automakers, industry sources warned.
The new net profit, operating profit and sales estimates are up 14.2 percent, down 2.7 percent and down 2.4 percent, respectively, from the levels Toyota reported for fiscal 2018.

The leading Japanese automaker now assumes exchange rates of ¥106 to the dollar for fiscal 2019, against the previously assumed ¥110, and ¥121 to the euro, against ¥125.

The revision of the assumed exchange rates will lead to a fall of ¥180 billion in the Toyota group’s operating profit from the initially estimated level, the firm said.

“We’ll take further measures,” such as cost reductions, to improve profitability, Kenta Kon, operating officer of Toyota, told a press conference in Tokyo.

Toyota forecasts its group automobile sales around the world in fiscal 2019, including sales at subsidiaries Daihatsu Motor Co. and Hino Motors Ltd., at 10.73 million units, down by 10,000 units from the earlier projected level, with demand for sedans seen decreasing in the mainstay North American market.

“We’ll keep a close watch on the impact that the U.S.-China trade war has on the global economy,” Toyota Executive Vice President Moritaka Yoshida told the press conference.

Meanwhile, Toyota released robust consolidated earnings for April-June.
Its net profit in the first quarter of fiscal 2019 totaled ¥682,974 million, up 3.9 percent from a year before and marking the highest level for the period, thanks chiefly to strong sales of newly launched vehicles.

Toyota saw its sales rise 3.8 percent to ¥7,646,091 million, also the highest, and operating profit at ¥741,951 million, up 8.7 percent.

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