Toyota has reported a 43% drop in operating profit during the second quarter of the current fiscal year as it was hit by currency headwinds.

Reuters reported that Toyota’s results were in line with analyst projections.

Operating income in the quarter ended 30th September was put at 474.6 billion yen, 42.6% under the total for the same quarter of last year. Net income in the quarter was off 35.6% at 393.7 billion yen. Net revenue for the quarter was posted at 6,481.4 billion yen, some 8.8% down on last year.

In the first half of the fiscal year, operating income decreased from 1.5834 trillion yen to 1.1168 trillion yen, down almost 30%. Net income decreased from 1.2581 trillion yen to 946.1 billion yen.

Toyota said that major factors contributing to the first half operating profit decrease included currency fluctuations of 565.0 billion yen offset by an increase of 220.0 billion yen due to cost reduction efforts.

Commenting on the results, TMC Executive Vice President Takahiko Ijichi said: “Despite the positive factors such as cost reduction and marketing efforts, operating income was down 466.5 billion yen compared to the first half of the last fiscal year, due to the significant impact of yen appreciation. Nevertheless, operating income excluding the overall impact of foreign exchange rates, as well as swap valuation gains and losses was up 200 billion yen.”

Consolidated vehicle sales during the six month period to the end of September (H1) totalled 4,363,537 units, an increase of 85,530 units compared to the same period last fiscal year. On a consolidated basis, net revenues for the period totalled 13.07 trillion yen, a decrease of 7.2%.

In Japan, H1 vehicle sales totalled 1,078,810 units, an increase of 94,413 units. Operating income, excluding the impact of valuation gains/losses from interest rate swaps, decreased by 473.4 billion yen to 485.7 billion yen.

In North America, H1 vehicle sales totalled 1,400,369 units, a decrease of 12,695 units. Operating income, excluding the impact of valuation gains/losses from interest rate swaps, increased by 11.0 billion yen to 296.8 billion yen.

In Europe, H1 vehicle sales totalled 434,381 units, an increase of 27,029 units, while operating income, excluding the impact of valuation gains/losses from interest rate swaps, increased by 2.4 billion yen to 34.6 billion yen.

In Asia, H1 vehicle sales totalled 764,750 units, an increase of 111,184 units, while operating income, excluding the impact of valuation gains/losses from interest rate swaps, decreased by 23.1 billion yen to 219.6 billion yen.

In other regions (including Central and South America, Oceania, Africa and the Middle East), H1 vehicle sales totalled 685,227 units, a decrease of 134,401 units, while operating income, excluding the impact of valuation gains/losses from interest rate swaps, decreased by 13.8 billion yen to 55.2 billion yen.

Full year sales forecast shaved down, operating profit projection up

For the fiscal year ending March 31, 2017, Toyota revised its consolidated vehicle sales forecast from 8.90 million units to 8.85 million units, in “consideration of the latest sales trends worldwide”.

Toyota also revised its consolidated financial forecasts for the fiscal year. Based on an exchange rate assumption of 103 yen to the U.S. dollar and 114 yen to the euro, Toyota now forecasts consolidated net revenue of 26.0 trillion yen (unchanged), operating income of 1.7 trillion yen (up from 1.6 trillion yen), income before income taxes of 1.90 trillion yen (up from 1.78 trillion yen) and net income of 1.55 trillion yen (up from 1.45 trillion yen).