The world’s biggest automaker by sales recorded once again a profit increase for last year, but the current one will not be as favorable.
Toyota announced this week its financial results for the fiscal year ended March 31 and the automaker’s earnings hit three years in a row of record figures. Even if the total consolidated vehicle sales totaled 8,681,328 units, a decrease of 290,536 units compared to the previous fiscal year, net revenues for the period rose 4.3 percent to 28.4031 trillion yen, operating income increased from 2.7505 trillion yen to 2.8539 trillion yen, while net profit jumped 6.4 percent from 2.1733 trillion yen to 2.3126 trillion yen (21.24 billion dollars). Major factors behind the increase included some cost reduction efforts and favorable currency fluctuations, the company said. However, with a much stronger yen, Toyota forecasts its net profit will drop 35 percent for the year ending March 2017 to 1.5 trillion yen (13.8 billion dollars), based on an exchange rate of 105 yen to the US dollar and 120 yen to the euro. The dollar averaged a far more favorable 120 yen last year.
“We have benefited from an exchange rate tailwind that has helped raise our earnings above the level of our true capabilities,” President Akio Toyoda, said in a statement. “Although this has enabled us to take on new challenges, that set of circumstances is likely to change for the worse this year.”
The automaker also said this projection did not include the effects of suspending operations on its plants in Japan in the aftermath of the deadly earthquakes that struck the island of Kyushu last month. Toyota halted the output because of parts shortage in stages between April 15 and 23, for the production to be subsequently restarted in stages from April 25 through 28, and, following a scheduled holiday period, all remaining vehicle assembly lines were operational from May 6 through 14. According to estimates made by analysts, a full week of loss production would total less than 90,000 vehicles and cost the company between 50 billion to 70 billion yen (460 million to 644 million dollars).