Toyota Motor Corporation (TMC) boosted operating profit for the fiscal year ended 31 March 2011 from JPY147.5bn to JPY468.2bn and net profit from JPY209.4bn to JPY408.1bn, on sales up just 0.2% to JPY18.993 trillion.
However, fourth quarter operating profit fell 52% to JPY46.1bn (US$570m), compared with an average estimate of JPY94.6bn yen from 17 analysts who revised their numbers after the 11 March earthquake, according to Thomson Reuters I/B/E/S.
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The weakest operating profit in seven quarters was, Toyota said, due to the earthquake and tsunami that was expected to disrupt Japanese auto industry production and sales for most of this calendar year.
Net income was JPY25.4bn (US$314m) for the final three months to 31 March on sales off 12% to JPY4.64 trillion.
Toyota had earlier forecast full year sales of JPY19.2 trillion, operating income of JPY550bn and net profit of JPY490m.
The company said on Wednesday (11 May, 2011) a “significant increase in vehicle sales, particularly in emerging markets, and continued cost reductions including company-wide ‘value analysis activities’ were the main reason for the large boost to full-year operating profit. It said “marketing efforts” had contributed JPY490.0bn and cost reductions JPY180.0bn but effects of the 11 March earthquake/tsunami had cost JPY110.0bn.
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By GlobalDataConsolidated vehicle sales rose 71,000 units to 7.308m.
TMC president Akio Toyoda said in a statement: “Our business environment continued to be challenging due to yen appreciation among other [factors]. Nevertheless, we managed to improve our profit structure even further thanks to the support from all our stakeholders, in particular our customers.”
Japanese vehicle sales fell 250,000 units to 1.913m and operating income in Japan was off JPY137.2bn to a loss of JPY362.4bn.
North American vehicle sales fell 67,000 units to 2.031m but operating profit there rose JPY254.1bn to JPY339.5bn yen, including JPY27.6bn of valuation gains/losses on interest rate swaps. Excluding those, operating profit rose JPY257.8bn to JPY311.9bn.
European vehicle sales fell 62,000 to 796,000 units and operating profit rose JPY46.1bn to JPY13.1bn.
Asian vehicle sales were up 276,000 units to 1.255m and operating profit rose by JPY109.4bn to JPY313.0bn.
Central and South America, Oceania and Africa vehicle sales were up 174,000 to 1.319m units with operating profit up JPY44.6bn to JPY160.1bn.
Financial services operating profit rose JPY111.3bn to JPY358.2bn including JPY37.4bn of valuation gains/losses from interest rate swaps. Excluding those, operating profit was up JPY104.9bn to JPY320.8bn due mainly to decreased loan and residual losses expenses plus increased lending balance, mainly in the United States.
TMC said it would not announce forecasts for fiscal 2011/2012 “as more time is needed to complete the examination of production and sales plans due to the impact of the Great East Japan Earthquake”.
It did, however, say a full-year dividend of JPY30 per share would be proposed at the general shareholders meeting in June.
According to Reuters, analysts have forecast an average operating profit of JPY307.5bn yen ($3.83bn) for the current fiscal year ending 31 March, 2012, down 34% year on year. Uncertainties over the broken supply chain had yielded a wide range, from a loss of JPY25bn to a profit of JPY846bn, the news agency noted.
Edmunds.com said the Toyota brand itself sold 1.8m vehicles in the US in the 2011 fiscal year, up slightly (0.9%) year on year but “significantly below” the overall industry average (+12.6%) for the period.
“Toyota lost some market share in 2011, falling from 16.6% in 2010 to 15.0% in 2011,” the consumer websites’ analysts said, adding that its incentives were 26% higher in 2011 compared to 2010, even as its average ‘True Cost of Incentives’ [an Edmunds measure] “decreased gradually in each quarter of FY2011, from US$2,235 in Q1 to $2,007 in Q4.
Toyota vehicles averaged 51 days to turn (DTT) in 2011, an increase from 44 DTT in 2010, Edmunds added.
Quarterly lease penetration fell throughout the fiscal year from 25.4% in Q1 2011 to 21.9% in both Q3 and Q4 2011.
Senior analyst Michelle Krebs said: “Toyota has been socked with one thing after another. They had not yet recovered from last year’s unintended acceleration fiasco when the Japan earthquake knocked out some of its production. As a result, Toyota posted a lower market share for the fiscal year even as the company spent 26% more on incentives compared to the previous year.”
Director of industry analysis Jessica Caldwell added: “With gas prices as high as they are – almost $4 per gallon – Toyota should be in a prime spot to win market share, but the supply simply isn’t there. Toyota shoppers are starting to expand their consideration to other brands. Many Camry shoppers, for example, are increasingly looking at American products like the Chevy Malibu or Ford Fusion.”
CEO Jeremy Anwyl said: “With the reversal of fortunes of Japanese automakers, General Motors, Ford and Chrysler have a golden opportunity to reintroduce their vehicles to potential – albeit perhaps still sceptical – car buyers.”
See also: COMMENT: Toyota’s perfect storm
