Toyota posts record Q1 profit
TOKYO: Japanese car giant Toyota yesterday posted a record first-quarter net profit, thanks to strong sales in North America and China, but warned that threatened United States sanctions on the car sector could have a “very big” impact on earnings.
It said ongoing trade frictions between the US and China, as well as Washington’s tariffs on metal imports, would also eat into its bottom line.
The carmaker said profit rose 7.2 per cent to 657.3 billion yen (RM24.07 billion) in April-June, its highest-ever first-quarter result.
Operating profit jumped 18.9 per cent to 682.7 billion yen, with sales up 4.5 per cent at 7.4 trillion yen.
However, Toyota said it expected profit to fall 15 per cent for the fiscal year to March next year.
“On trade issues, we are expecting profits will decline by 10 billion yen because of (higher costs of) steel and aluminium in North America,” said Toyota senior managing director Masayoshi Shirayanagi.
“We have not yet factored in the impact of car tariffs. If they are imposed, we think the impact will be very big,” he added.
Satoru Takada, an analyst at TIW, a research and consulting firm, said: “Compared to its domestic rivals, Toyota has been relatively competitive.
“The carmaker performed strongly in North America and its sales in China are steady.
“US tariffs will be a major risk for the Japanese car industry. If tariffs are imposed, it will deal a big blow to Japanese carmakers,” said Takada.
Increased sales volume and marketing efforts helped boost the bottom line by 45 billion yen while cost cutting contributed 15 billion yen, said the company.