Home Business Toyota Q4 operating profit fell 33%, according to Reuters

Toyota Q4 operating profit fell 33%, according to Reuters

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© Reuters. PHOTO FILE: A man walks past the Toyota logo at the Tokyo Motor Show in Tokyo, Japan, October 24, 2019. REUTERS / Edgar Su

TOKYO (Reuters) – Toyota Motor Corp reported on Wednesday that fourth-quarter earnings fell by a third as the yen fell and solid demand failed to offset the effects of manufacturing failures caused by global chip shortages and restrictions on China’s COVID-19.

The world’s largest automaker in terms of sales earned operating profit of 463.8 billion yen ($ 3.56 billion) in the January-March quarter, well below the average estimate of seven analysts surveyed by Refinitiv, at 521.1 billion yen.

This is compared to 689.8 billion yen in profit for the same period a year earlier.

In the new fiscal year, which began on April 1, Toyota’s operating profit is projected to decline by about 20% to 2.4 trillion yen from nearly 3 trillion yen in the previous year. This forecast is much lower than 3.36 trillion yen, which was previously expected in a survey of 25 analysts Refinitiv.

The sharp decline in the yen to a two-decade low has worked in favor of Japan’s export-oriented car industry, but rising commodity prices and disruptions in the global supply chain, exacerbated by China’s austerity measures on COVID-19, are putting pressure on profitability.

Toyota on Tuesday cut its global production plan for May by about 50,000 vehicles to about 700,000 as it plans to suspend 14 lines at eight domestic plants for up to six days this month due to a COVID blockade in China.

The plan stems from several cuts to the production plan between April and June, which disappointed its suppliers.

(1 dollar = 130.4100 yen)

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