Toyota posts 25% profit slide, cuts FY output target to 9.2mn

TOKYO: Toyota Motor Corp on Tuesday posted a worse-than-expected 25% drop in quarterly profit, as soaring parts and materials costs outweighed a boost from the sliding yen, and cut its annual output target on continuing risks to chip supply.

Toyota said it now expects to produce 9.2 million vehicles this fiscal year, down from the previously forecast 9.7 million, saying it remains “difficult to predict the future due to risks such as procurement of semiconductors” - an issue that has roiled the whole auto sector.

Operating profit for the three months ended Sept. 30 fell to 562.7 billion yen ($3.79 billion), missing an average estimate of 772.2 billion yen in a poll of 12 analysts by Refinitiv.

In the same period a year earlier, the world’s biggest automaker by sales reported a 749.9 billion yen profit.

“The business environment is changing dramatically such as the rapid changes of foreign exchange rates, raising interest rates, soaring materials prices, and more,” Toyota’s chief accounting officer Masahiro Yamamoto told analysts.

Still, the company stuck to its full-year operating forecast of 2.4 trillion yen for the fiscal year through March 31.

Shares in Toyota were down 1.9% at 0455 GMT, versus a 0.1% rise in the Nikkei average.

Toyota said last week its global production rebounded by 30% in the quarter that ended in September, but warned shortages of semiconductors and other components would continue to constrain output in coming months.

Toyota profit to rise but eyes will be on its shaky supply chain, EV strategy

It also warned last month that it would be unlikely to meet its 9.7 million vehicle production goal for this financial year citing a scarcity of chips.

The yen has plunged around 30% this year against the US dollar, but the benefit of the cheap yen - making sales overseas worth more - has been offset by soaring input costs.

Toyota estimated in August that materials costs for the full year will be 1.7 trillion yen, a 17% increase from previous estimate.

The automaker is also under scrutiny from green investors and environmentalists over its slow push into fully electric vehicles (EV).

Just a year into its $38 billion EV plan, Toyota is already considering rebooting it to better compete in a market growing beyond its projections, Reuters reported last month.