Despite its damaging recall issues, Toyota’s group operating profit for the year that ended on March 31 could reach around JPY100bn (US$1.1bn) according to Japanese media.

The Yomiuri newspaper said that the company is due to release its earnings report tomorrow and would beat its loss forecast thanks to government incentives to boost sales and by cost-cutting efforts.

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The Nikkei business daily estimated an operating profit figure of JPY50bn (US$560m).

Toyota slashed its operating loss forecast to JPY20bn from JPY350bn in February after it posted an operating profit of JPY189bn (US$2.1bn) in the three months to December.

In addition to the economic slump, Toyota’s reputation for safety and reliability has taken a severe beating after it recalled about 10m vehicles worldwide, mostly for problems with sudden acceleration.

However, its global sales have been recovering steadily. In March, worldwide sales surged 26|% year-on-year while global production jumped over 80% compared with a year ago, when the industry scaled back to cope with falling demand.

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Toyota’s U.S. vehicle sales rose nearly 13% for the year-to-date through April despite the massive recalls.

Last month the company agreed to pay a US$16.4m fine, the largest ever by a carmaker in the US, for hiding the accelerator pedal defects for at least four months.

Toyota has also been hit with at least 97 lawsuits seeking damages for injury or death linked to sudden acceleration and 138 class action lawsuits from customers suing to recoup losses in the resale value of vehicles.