Business

Toyota cuts full-year profit forecast, warns over Brexit

TOKYO Japanese car giant Toyota slashed its full-year net profit forecast yesterday after saying its nine-month figure had tumbled nearly 30 per cent as it was hit by investment losses.

The firm's senior managing officer Masayoshi Shirayanagi also told reporters there was no way to avoid a negative impact in the event of a no-deal Brexit - days after fellow Japanese carmaker Nissan announced a cut in production in Britain.

The maker of the Camry sedan and Prius hybrid now expects an annual net profit of 1.87 trillion yen (S$23 billion) instead of the 2.3 trillion yen it had projected three months ago.

The new forecast represents a 25-per cent plunge from the previous year.

Shares in the carmaker fell 1 per cent on the news, reversing gains earlier in the day, as the results were worse than even the most pessimistic analyst had feared.

Net profits for the nine months to December came to 1.42 trillion yen, down 29.3 per cent from the same period the previous year.

Toyota's bottom line was hit by losses of more than 350 billion yen on its investment portfolio, as the stock market fell in the final months of last year.

"The appraisal loss appeared to be a major factor that squeezed Toyota's profit," said analyst Satoru Takada from Tokyo-based research and consulting firm TIW.

Operating profit rose 9.5 per cent to 1.94 trillion yen on sales of 22.5 trillion yen, an increase of 3.1 per cent. Toyota left its forecasts of operating profit and sales unchanged for the full year to March 31. It projected operating profit at 2.4 trillion yen and sales at a record 29.5 billion yen for the current fiscal year.

Regarding Brexit, Mr Shirayanagi said: "We cannot avoid the (negative) impact, no matter how much we prepare beforehand, if Britain leaves the EU (European Union) with no deal."

He said the company "will monitor the situation, hoping that it will not happen", adding it was not at the moment considering production changes.

On Sunday, Nissan announced it was cancelling plans to build its X-Trail SUV at its plant in north-east England despite Brexit assurances from the government.- AFP

BUSINESS & FINANCE