Toyota Motor Corporation (TMC ) returned to operating profit in the financial year ended 31 March, 2010, on revenue down just 7.7% year on year to JPY18.95 trillion. The operating profit of JPY147.5bn compared with the staggering JPY461bn loss booked in fiscal year 08/09.
Income before income taxes, minority interest and equity in earnings of affiliated companies was JPY291.4bn. Net income rose to JPY209.4bn from a year-ago loss of JPY437bn.
Toyota said the JPY608.5bn operating income increase was due mostly to a JPY520bn gain from cost reduction efforts including a JPY470bn gain from reduced fixed costs.
Consolidated vehicle sales for the fiscal year fell 330,000 units to 7.24m.
The operating result comfortably beat pundits’ expectations. Japan’s Yoimuri newspaper had yesterday said Toyota group operating profit for the year could reach around JPY100bn, beating the automaker’s own loss forecast, thanks to government incentives to boost sales and by cost-cutting efforts. The Nikkei business daily has estimated an operating profit of JPY50bn.
Toyota had slashed its operating loss forecast to JPY20bn from JPY350bn in February after it posted an operating profit of JPY189bn (US$2.1bn) for the third fiscal quarter to 31 December.
TMC President Akio Toyoda said in a statement: “I am sincerely grateful to our dealers and suppliers who remained fully committed to providing as many cars as possible to customers, and to our employees as well as our overseas business operations for their efforts in working together so that the company will return to its normal state as soon as possible. And finally, above all, I am sincerely grateful to our customers of more than 7m people around the world who newly purchased Toyota vehicles.”
Senior managing director Takahiko Ijichi told a press conference in Tokyo today (11 May 2010) that recall-related costs for the financial year to 31 March would total JPY180bn.
“It was a year of being constantly on alert due to a series of recalls,” Toyoda told the conference. “This fiscal year marks a truly fresh start for Toyota and I would like to steer… towards new strategies for growth,” he added.
TMC said all regions had boosted operating income in the fiscal year, though not necessarily into the black.
In Japan, vehicle sales rose 218,000 units to 2.16m and operating income there improved JPY12.3bn to a loss of JPY225.2bn.
In North America, vehicle sales fell 114,000 units to 2.1m and operating income rose JPY475.6bn to a JPY85.4bn profit, including JPY31.3bn of valuation profits from interest rate swaps. Operating income, excluding the interest rate swap profit, increased JPY417.1bn to 54.1bn yen, due mainly to improved market conditions and financial services.
European vehicle sales fell 204,000 to 858,000 and operating income improved JPY110.3bn to a JPY33bn loss.
Asian vehicle sales rose 74,000 units to 979,000 and operating income was up JPY27.5bn to JPY203.6bn.
Sales in other regions including Central and South America, Oceania, Africa and the Middle East, fell 304,000 units to 1.14m while operating income for Central and South America, Oceania and Africa increased JPY27.9bn to 115.5bn yen.
Financial services operating income rose JPY318.9bn to JPY246.9bn including a JPY31bn gain on valuation profits from interest rate swaps. Excluding those valuation gains, operating income increased JPY254.4bn to JPY215.9bn due to reduced expenses related to loan losses and residual losses and improved lending margins as a result of a declining funding cost mainly in North America.
For fiscal year 2010/11, TMC is forecasting consolidated vehicle sales up just 53,000 units to 7.29m due to increased volume outside Japan.
Based on an exchange rate of JPY90 to the US dollar and JPY125 to the euro, the automaker has forecast consolidated net revenue of JPY19.2 trillion, operating income up 89.8% from fiscal year 2009/10 to JPY280bn and net income up 48% to JPY310bn.
TMC also announced a cash dividend for the full fiscal year of JPY45 per share, to be proposed at the general shareholders’ meeting in June.