TOYOTA EXPECTS its net profit to surge 2½ fold this year to nearly $10 billion as it rebounds from natural disasters that disrupted production in 2011.
The estimated net earnings of 760 billion yen would, if realised, be Toyota’s highest in five years. Ever since Akio Toyoda, the grandson of its founder, took over as president in early 2009, the automaker has been beset by external and internal crises – from the global financial collapse to an uproar over recalls to last year’s Japanese earthquake.
“The old Toyota would probably be in the red,” Mr Toyoda said yesterday, alluding to aggressive cost-cutting measures that have lowered the revenue point at which the company can break even.
The quake, and flooding in Thailand a few months later, curtailed supplies of crucial auto parts and reduced Toyota’s annual output by 400,000 vehicles last year – a decline that helped cost the company its position as the world’s largest automaker.
But Toyota has put most of its supply issues behind it and expects to make a record number of cars and trucks in 2012 – 9.59 million, including its Daihatsu and Hino subsidiaries. That should again make it a contender for the number one spot in the industry, though General Motors and Volkswagen, its biggest rivals, are also expanding production.
In recent months Toyota has benefited from an upswing in demand for cars in the US and Japan and a slight weakening of the yen’s exchange rate – a big influence on the earnings of export-dependent Japanese companies.
Net profit for fiscal 2011, which ended in March, was down 31 per cent to Y283.5 billion, but conditions improved steadily as the year progressed. In the final quarter, Toyota earned Y121 billion, roughly what it made in the first three quarters combined. The company said it expected sales to rise 18 per cent this year to Y22 trillion.
Since the start of the year the value of Toyota’s shares has risen by roughly 20 per cent, about double the rate of increase of the Nikkei 225 average. They closed unchanged at Y3,145 yesterday before the earnings announcement. Toyota remains less than half as profitable as it was at its pre-financial crisis peak. – (Copyright The Financial Times Limited 2012)
