Toy­ota’s Q2 op­er­at­ing profit skids on strong yen

The Sun (Malaysia) - - SUNBIZ -

TOKYO: Toy­ota Mo­tor Corp yes­ter­day said op­er­at­ing profit al­most halved in the sec­ond quar­ter as the world’s top-sell­ing au­tomaker smarted from a strong yen that has made its Ja­pan-built cars less com­pet­i­tive and crimped the value of over­seas earn­ings.

Op­er­at­ing profit fell 43% to ¥474.6 bil­lion (RM18.3 bil­lion) in the July-Septem­ber pe­riod com­pared with a year ear­lier. The re­sult was roughly in line with the ¥476.26 bil­lion av­er­age of 12 es­ti­mates from an­a­lysts sur­veyed by Thom­son Reuters I/B/E/S.

While all Ja­panese au­tomak­ers are feel­ing the cur­rency pinch, Toy­ota is more ex­posed to swings in for­eign ex­change be­cause it pro­duces two-fifths of its ve­hi­cles in Ja­pan, half of which it ex­ports.

The lat­est yen squeeze also comes as sales in North Amer­ica, one the world’s big­gest auto mar­kets, slow af­ter record sales in 2015 that au­tomak­ers and an­a­lysts saw as the peak of the US re­cov­ery from the 2008-2009 eco­nomic cri­sis.

Cheap fuel is also spurring de­mand for petrol-guz­zling mod­els leav­ing Ja­panese au­tomak­ers strug­gling to raise pro­duc­tion of sport util­ity ve­hi­cles and trucks.

Toy­ota has said it will make more of those larger ve­hi­cles in­clud­ing its pop­u­lar RAV4 cross­over model in the US, to take ad­van­tage of that shift in con­sumer pref­er­ence.

Yes­ter­day, Toy­ota also changed its full-year bud­geted yen rate to 103 ver­sus the US dol­lar and 114 to the euro, from 102 and 113 re­spec­tively. It lifted its fore­cast for full-year op­er­at­ing profit to ¥1.7 tril­lion from ¥1.6 tril­lion, which would be its low­est since 2013. – Reuters

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