Toyota posts big Q1 operating loss
Tokyo, August 2, 2011
Toyota Motor Corp reported its first quarterly loss in two years on Tuesday as Japan's biggest earthquake on record hammered production and the yen's rise hit profits on exports. It raised its annual forecast.
The supply constraints from the March 11 earthquake have eased faster than initially feared and Toyota has said production volumes will recover to pre-disaster levels in stages starting from July. But the dollar's drop far below the 82 yen that Toyota had assumed for the year to March 2012 is set to eat further into profits as Toyota exports more than half of its vehicles produced in Japan.
The world's biggest automaker made an operating loss of 108 billion yen ($1.4 billion) in the April-June quarter, compared to a 211.7 billion yen profit a year earlier. The result was better than the average loss estimate of 190 billion yen in a survey of six analysts by Thomson Reuters I/B/E/S.
The company posted a net profit of 1.2 billion yen compared to a 190.5 billion yen net profit the previous year. Revenue fell 29.4 percent to 3.44 trillion yen.
For the full year to March 2012, Toyota raised its forecast for operating profit, which excludes earnings from China, to 450 billion yen. A poll of 20 analysts produced a forecast of 529.7 billion yen.
Even before the March disaster and the yen's recent surge, Toyota has been trying to slash costs by roughly 30 percent to take on South Korea's Hyundai Motor Co, which has boosted its market share globally in recent years by offering quality products at competitive prices.
With the dollar around 77.7 yen , Toyota executives had warned that keeping as much production capacity as it has in Japan was illogical, although they have stopped short of flagging a politically sensitive shift overseas.
The company said it now assumes a dollar rate of 80 yen instead of 82 yen this financial yen, and the euro at 116 yen instead of 115 yen. On Tuesday, the dollar was trading around 77.35 yen while the euro was around 110.25 yen.
Toyota has said it will continue taking steps to lower the cost structure of its domestic operations to keep at least 3 million vehicles of annual production in Japan in the interest of protecting Japanese jobs and manufacturing. Last month, it announced plans to streamline vehicle development and production through a reorganisation of its car assembly units. - Reuters