Toyota Motor Corporation on Friday reported a stunning year on year fall in its full fiscal year operating profit from 2.27 trillion yen to a loss of JPY461bn. It also forecast that the operating loss for fiscal 2009/10 would almost double to JPY850bn but estimated that, through the reduction of variable and fixed costs, it would achieve a total profit improvement of around JPY800bn in fiscal 2010.
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Japanese media had previously suggested the company would book at least a JPY400bn loss for the year to 31 March 2009; this is believed to be Toyota’s worst operating result in its history.
Consolidated net revenues fell 21.9% to 20.53 trillion yen while and Toyota lost JPY560.4bn before income taxes, minority interest and equity in earnings of affiliated companies. Net income tumbled from 1.72 trillion yen in 2008 to a loss of JPY437bn.
Toyota said contributing factors to the 2.73 trillion yen operating income decline included 1.48 trillion yen in marketing activities costs and JPY760bn from the appreciation of the yen against the US dollar and the euro.
TMC president Katsuaki Watanabe said: “Both revenues and profits declined severely during this period. The negative impact was a consequence of the significant deterioration in vehicle sales particularly in the US and Europe, the rapid appreciation of the yen against the US dollar and the euro and the sharp rise in raw materials.”
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By GlobalDataConsolidated vehicle sales fell 1.34m units to 7.57m. Japan sales fell 243,000 to 1.95m units and operating income there fell 1.68 trillion yen to a loss of JPY237.5bn.
North America vehicle sales fell 746,000 to 2.21m units and operating income plunged JPY695.5bn to a loss of JPY390.2bn including JPY73.9bn of valuation losses from interest rate swaps. Excluding that, operating income fell JPY713bn yen to a loss of JPY316.3bn due to falls in both North American production and vehicle sales.
European vehicle sales fell 222,000 to 1.06m units and operating income fell JPY284.8bn to a loss of JPY143.3bn.
Asian sales were 905,000 units down 51,000 units. Operating income fell JPY80.3bn to JPY176.1bn.
In Central and South America, Oceania, Africa and the Middle East and other ‘general export’ markets, vehicle sales fell 84,000 units to 1.44m units while income was off JPY56.3bn to JPY87.6bn.
Financial services operating income fell JPY158.5bn to a loss of JPY72bn yen including JPY80.2bn of valuation losses from interest rate swaps. Excluding those, operating income fell JPY146.3bn to JPY8.2bn. Higher outstanding loan balances and improved lending margins were offset by an increase in allowance for credit and residual value losses mainly in the US
TMC estimated that consolidated vehicle sales for this fiscal year ending 31 March, 2010 would be 6.5m units, down 1.06m from fiscal 2008/9, “due to continuance of the current severe conditions of each market”.
Based on an exchange rate of JPY95 to the US dollar and JPY125 to the euro, it forecast consolidated net revenues of 16.5 trillion yen, operating loss of JPY850bn and net loss attributable to Toyota Motor Corporation of JPY550bn yen.
Watanabe said: “It appears to take some more time before the financial markets in the US and Europe normalise and the global economy recovers.
“However, in the 2010 fiscal year, we plan to accelerate our profit improvement activities including the expansion of our hybrid vehicle line-up such as the next generation Prius in May and the Lexus’ HS250h in July.
“All totaled, we plan to launch four hybrid models in Japan and three models overseas within this fiscal year. Through the reduction of variable and fixed costs, we estimate our total profit improvement in fiscal year 2010 will be around JPY800bn.
“For the mid-term, we plan to thoroughly analyse our customers’ needs in each region and develop product line-ups which will focus on hybrid and compact vehicles with more cost reduction efforts.
“We will also concentrate on resource-rich and developing countries with the aim of providing high-quality, affordable and attractive models from the customers’ viewpoint.
“In addition, we will continue to accelerate commercialisation of next-generation technologies in the areas of environment, energy and safety including hybrids, plug-in hybrids, next-generation batteries, bio fuels and fuel cell vehicles.
“We also aim to establish flexible and effective systems in the areas of development, production and sales to respond to changes in business environment.”
TMC will pay a cash dividend for the full year of JPY100 a share, down JPY40 year on year.
