Toyota third-quarter net profit drops but keeps full-year forecasts

Toyota third-quarter net profit drops but keeps full-year forecasts

Semiconductors are an essential component of modern cars, and Toyota has struggled to keep up with its own production targets
Semiconductors are an essential component of modern cars, and Toyota has struggled to keep up with its own production targets. Photo: Yuichi YAMAZAKI / AFP/File
Source: AFP

PAY ATTENTION: Celebrate South African innovators, leaders and trailblazers with us! Click to check out Women of Wonder 2022 by Briefly News!

Japan's Toyota said Thursday its net profit for the third quarter fell eight percent, but it left its full-year forecasts unchanged as the cheaper yen offsets the impact of soaring materials prices.

The world's top-selling carmaker, which reshuffled its executive line-up last month, reported a net profit of 727.9 billion yen ($5.6 billion), down from 791.7 billion yen a year earlier.

Although the company retained its title over Volkswagen last year, it is still suffering production setbacks caused by a chip shortage, along with other industry players.

"Dealers, suppliers and production sites worked hard under circumstances where production plans fluctuated greatly due to factors such as semiconductor shortages and natural disasters," Toyota said in a statement on Thursday.

But it said it still expected to see net profit of 2.36 trillion yen in the 12 months to March 2023, down 17 percent on-year.

Read also

BP posts record profit, dilutes green target

"We are absorbing the burden on our suppliers caused by soaring materials and energy prices in order that activities to strengthen competitiveness are installed widely and deeply across the entire supply chain," it said.

PAY ATTENTION: Follow Briefly News on Twitter and never miss the hottest topics! Find us at @brieflyza!

For April-December, net profit dropped 18 percent to 1.90 trillion yen.

While operating profit fell in the nine months, it was up in the third quarter "as the positive effects of a weaker yen and volume increases exceeded the negative effect of soaring materials prices", Toyota said.

Semiconductors are an essential component of modern cars, and Toyota has struggled to keep up with production targets simply because "there are not enough" chips to meet demand, Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute, told AFP before the earnings release.

But Toyota is in a better position than many of its smaller rivals as it "has a strong bargaining power" with parts suppliers, Sugiura said.

Read also

SoftBank Group reports $5.9 bn third-quarter loss on tech slump

China's decision to end its zero-Covid policy and any economic stimulus measures from Beijing are also positive factors, with car sales there likely to rise, he added.

In January, Toyota set a confident 2023 production target of 10.6 million vehicles -- higher than in recent years, including the nine million made in pre-pandemic 2019.

Still, it warned that actual production could be 10 percent lower because of parts shortages, which have already forced it to slash targets for this year.

Toyota made a surprise shake-up of its leadership last month, replacing Akio Toyoda, whose grandfather founded the company, with 53-year-old Koji Sato as CEO.

Toyoda, 66, will step aside to become board chairman as Sato -- previously chief branding officer, and president of Toyota's luxury Lexus brand -- takes up the roles of chief executive and president.

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.