Profits at Japanese car giant Toyota hit the skids despite record sales, the company admitted on Wednesday, although it said it expected to accelerate out of trouble in the year ahead.
The maker of the Camry sedan and Prius hybrid said net profit was down 24.5 per cent from its best-ever result the year before, at 1.88 trillion yen ($17 billion) in the year to March 31.
Toyota’s bottom line was pushed down by some 294 billion yen in book losses on its investment portfolio.
Senior managing officer Masayoshi Shirayanagi blamed “the deterioration of the stock market in the current period” for the investment losses. He added the figures also suffered in comparison with previous year’s 250-billion-yen boost from US tax reform.
However, the firm forecast net profit to rise 19.5 per cent in the coming year to 2.25 trillion yen.
And sales rose 2.9 per cent to a record 30.23 trillion yen, leaving an operating profit of 2.47 trillion yen, which was up 2.8 per cent year-on-year.
Akio Toyoda, the firm’s president, noted it was the first time a Japanese company had ever logged annual sales in excess of 30 trillion yen.
The firm expects operating profit for the current year to March 2020 will increase 3.3 per cent to 2.55 trillion yen. Sales are forecast to sag 0.7 per cent to 30 trillion yen.
“Toyota has cruised steadily, compared with its rivals,” said analyst Satoru Takada at TIW, a Tokyo-based research and consulting firm.
“The firm largely showed a reasonable performance around the world at a time when the global market is slowing down,” he said.
Rival firm Honda also announced on Wednesday that net profit plunged 42.4 per cent to 610 billion yen, citing losses related to reorganisation of the global automobile production in Europe. Sales rose 3.4 per cent to 15.9 trillion yen.
The company forecasts net profit for the year ending March 2020 will grow 9.0 per cent to 665 billion yen.
The business environment for auto companies has also been clouded by the US-China trade war and continued uncertainty from Brexit.