Toyota Motor Corporation (TMC) on November 5 announced financial results for the six months ended September 30, 2010.
On a consolidated basis, net revenues for the first half of the fiscal year totaled 9,678.4 billion yen, an increase of 15.5 percent compared to the same period last fiscal year. Operating income increased from a loss of 136.9 billion yen to 323.1 billion yen, while income before income taxes and equity in earnings of affiliated companies was 392.0 billion yen. Net income increased from a loss of 56.0 billion yen to 289.1 billion yen.
Operating income, compared to the same period last fiscal year, increased by 460.0 billion yen. Major factors contributing to the increase include the effects of marketing efforts of 570.0 billion yen and cost-reduction efforts of 90.0 billion yen.
Consolidated vehicle sales for the first half totaled 3,715 thousand units, an increase of 585,000 units compared to the same period last fiscal year.
Commenting on the first half results, TMC executive vice president Satoshi Ozawa said, “Operating income improved significantly despite the substantial negative impact from the strong yen. This was due to our marketing efforts such as improved sales by 585,000 vehicles and decreased loan-loss and residual-loss related expenses in our financial services for the first quarter, and to our cost reduction efforts such as our company-wide VA activities in close collaborations with our suppliers.”
With regard to its operating income by region, Toyota achieved year-on-year improvement in all regions for the first half fiscal year.
In Japan, operating loss improved by 205.7 billion yen, to a loss of 52.0 billion yen.
In North America, operating income increased by 119.0 billion yen to 145.9 billion yen, including 9.8 billion yen of valuation losses on interest rate swaps. Operating income, excluding the impact of valuation losses from interest rate swaps, increased by 143.7 billion yen to 155.7 billion yen. The increase was due to improved earnings from the financial services segment.
In Europe, operating loss improved by 9.7 billion yen, to a loss of 8.9 billion yen.
Operating income in Asia increased by 98.8 billion yen, to 164.2 billion yen.
In Central and South America, Oceania and Africa, operating income increased by 32.3 billion yen to 72.9 billion yen.
In the financial services segment, operating income increased by 59.3 billion yen, to 183.7 billion yen compared to the same period last fiscal year, including 400 million yen of valuation losses from interest rate swaps. Excluding these valuation losses, operating income increased by 76.6 billion yen to 184.1 billion yen. This was thanks to Toyota’s better-than-expected used car pricing that resulted in a decrease in loan-loss and residual-loss related expenses, partially through reversal of the relevant provisions as reported for the first quarter as well as an increase in lending balance following reinforcement of the company’s financing programs.
Regarding the forecasts for fiscal year 2011, TMC has revised its consolidated vehicle sales for the full fiscal year ending March 31, 2011 from 7.38 million to 7.41 million units, an increase of 30,000 units from previously announced forecast in August 2010. Based on the assumption of 85 yen to the United States dollar and 112 yen to the Euro on average for the full year, TMC revised its consolidated financial forecasts for fiscal year 2011 to net revenues of 19.0 trillion yen, operating income of 380.0 billion yen, income before income taxes and equity in earnings of affiliated companies of 410.0 billion yen and net income of 350.0 billion yen.
Commenting on the amended FY 2011 forecasts, Ozawa said, “We currently find ourselves in a very tough business environment, characterized by the radically and seriously appreciated yen in recent months, the risk of slowdown in demand recovery in the United States and Europe and falling demand following the end of the eco-car subsidies in Japan. Nevertheless, we will do our utmost in order to deliver as many vehicles as possible to our customers while continuing to improve our profit structure through further fixed cost and variable cost reduction activities.”
TMC also announced an interim cash dividend of 20 yen per share, in consideration of such factors as operating results and investment plans.
