Toyota’s third quarter profit jumps 22 per cent as weak yen helps - GulfToday

Toyota’s third quarter profit jumps 22 per cent as weak yen helps


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Toyota Motor Corp on Thursday posted a surprise 22 per cent rise in third-quarter operating profit, as a weaker yen and higher sales volumes helped the Japanese automaker overcome a jolt from soaring raw-materials costs.

Operating profit for the three months ended Dec.31 was 956.7 billion yen ($7.28 billion). That beat the average 764.54 billion yen profit estimated by 10 analysts, according to Refinitiv data. In the same period a year earlier, Toyota reported a 784.4 billion yen profit.

Like many global manufacturers, the world’s largest automaker is still grappling with the continued fall-out from semiconductor shortage and the pain from rising costs.

The Prius maker said it was working to secure a stable supply of chips, according to a presentation that accompanied the results.

While it trimmed its annual production target by about 1 per cent, to around 9.1 million vehicles, it stuck to its forecast for annual profit of 2.4 trillion yen for the year to end-March.

“Vehicle sales are very strong, but costs are rising,” said Koji Endo, senior analyst at SBI Securities. “Toyota has been gradually raising prices in the United States from around the second half of last year to offset that.”

The automaker is likely to comfortably exceed its full-year forecast, given that it has now delivered 2.1 trillion yen in the first nine months of the year, Endo said.

Vehicle sales rose across all major regions, with North America, its biggest market, showing the strongest growth of 16 per cent, double the overall average of 8 per cent gain.

Toyota benefited from a plunge in the yen in October last year. The Japanese currency hit a 32-year low of 151.94 to the dollar on Oct.21, prompting authorities to intervene.  As the prolonged global shortage of auto chips enters its third year, some car makers are suffering more than others.

Ford Motor Co last week blamed a 100,000 vehicle shortfall in its fourth-quarter volume mostly on the inability to obtain enough chips.

Separately, Volvo Cars said on Thursday 2023 was likely to be another challenging year, despite healthy demand for its vehicles, as the Swedish carmaker reported a fall in quarterly profit.

Volvo Cars, which is majority-owned by Chinese automotive company Geely Holding, said its fourth-quarter operating profit dropped to 3.4 billion crowns ($322.2 million)from 3.7 billion crowns a year earlier.

Profits were hit by high lithium prices, and having to buy semiconductors and logistics in the spot market, which can be more expensive than under long term contracts.

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