Toyota profit drops on COVID-19 outbreak but recovery expected

TOKYO: Toyota Motor Corp. reported Tuesday a sharp plunge in fiscal fourth quarter profit as the global pandemic slammed vehicle sales and halted production at its auto plants.

Japan's top automaker logged a net profit of 63.1 billion yen ($590 million) for the quarter ended in March, nosediving 86 per cent from 459.5 billion yen for the same period the year before.

Quarterly sales slipped 8 per cent to 7.1 trillion yen ($66 billion) from 7.8 trillion yen a year ago. Damage from COVID-19 cost Toyota 145 billion yen ($1.4 billion) in operating profit for the quarter, offsetting cost cuts, the company said. Toyota officials said it was difficult to project the future, given the varying degrees of lockdowns around the world and uncertainties on how the Coronavirus outbreak may develop.

The company did not give a net profit forecast for the fiscal year through March 2021, but acknowledged operating profit was expected to fall by a whopping 80 per cent. Sales are expected to recover as the pandemic is brought under control, it said. US production is resuming gradually, and sales are expected to recover to normal levels by early 2021, Chief Financial Officer Kenta Kon told reporters.

Unfavorable currency fluctuations and trade friction between the U.S. and China also hurt results. Toyota, which makes the Prius hybrid, Lexus luxury models and the Camry vehicle, recorded a fiscal annual profit of nearly 2.1 trillion yen ($19 billion) for the fiscal year that ended in March.