Toyota raises net profit forecast for fiscal 2024

Toyota said on the 5th that its consolidated net profit forecast for fiscal 2024 may decrease by 9% year-on-year to 4.52 trillion yen. This figure is 950 billion yen higher than the original forecast. In addition to recovering the impact of production stagnation, it also benefits from the growth in sales and price increases of profitable hybrid vehicles.

Toyota Motor said on February 5 that its consolidated net profit forecast (International Accounting Standards) for fiscal 2024 (ending March 2025) may decrease by 9% year-on-year to 4.52 trillion yen. This figure is 950 billion yen higher than the original forecast. In addition to recovering the impact of production stagnation caused by violations of the “model designation” certification required for mass production of automobiles, it also benefits from the growth in sales and price increases of profitable hybrid vehicles (HV). In addition, the depreciation of the yen also pushed up profits.

It is expected that operating income will increase by 4% to 47 trillion yen in fiscal 2024, and operating profit will decrease by 12% to 4.7 trillion yen. They are 1 trillion yen and 400 billion yen higher than the original expectations, respectively.

The boost effect brought by exchange rate fluctuations such as the depreciation of the yen will reach 540 billion yen. The exchange rate premise for the whole fiscal year is 1 dollar to 152 yen, which is adjusted from the original 147 yen to the direction of yen depreciation. Toyota’s operating profit will be pushed up by 50 billion yen for every 1 yen depreciation of the yen against the dollar. The average exchange rate from April to December 2024 is around 152 yen, and Toyota will adjust the exchange rate for the whole fiscal year to the same level as the actual level.

At the financial report briefing held on the 5th, Toyota Vice President Yoichi Miyazaki said that “adjusting prices, controlling sales bonuses, and expanding value chain benefits (providing services such as parts replacement after sales)”. The price increase effect brought about by the improvement of car functions will contribute 400 billion yen to the full-year profit.

The financial report for April to December 2024 released on the same day showed that operating income increased by 5% year-on-year to 35.6735 trillion yen, and net profit increased by 4% to 4.1003 trillion yen, a record high. Operating profit decreased by 13% to 3.6794 trillion yen. The decrease in sales and the increase in labor costs paid to suppliers had a negative impact on expenses.