Toyota profit drops on virus outbreak but recovery expected

Business

FILE- This Feb. 15, 2018, file photo shows the Toyota logo on the trunk of a 2018 Toyota Prius on display at the Pittsburgh Auto Show. Toyota Motor Corp. reported Tuesday, May 12, 2020 a sharp plunge in fiscal fourth quarter profit as the global pandemic slammed vehicle sales and halted production at its auto plants. (AP Photo/Gene J. Puskar, File)

TOKYO (AP) — Toyota Motor Corp. reported Tuesday a sharp plunge in fiscal fourth quarter profit as the global pandemic slammed vehicle sales and halted production at its auto plants.

Japan’s top automaker logged a net profit of 63.1 billion yen ($590 million) for the quarter ended in March, nose-diving 86% from 459.5 billion yen for the same period the year before.

Quarterly sales slipped 8% to 7.1 trillion yen ($66 billion) from 7.8 trillion yen a year ago.

President Akio Toyoda said the company is facing its biggest crisis since the global financial crisis, stressing how hard it had been just to report financial results.

But he said Toyota was learning to grow leaner and make a fresh start.

Toyota is striving to be reliable and needed by the world, he said. Toyoda promised to protect jobs and what he called “Toyota people,” the workers around the world, not just in Japan, with their skills and shared sense of mission.

“We feel no doubt, and we are not shaken in this belief,” he said.

Damage from COVID-19 cost Toyota 145 billion yen ($1.4 billion) in operating profit for the latest quarter, offsetting cost cuts, the company said.

Toyota officials said it was difficult to project the future, given the varying degrees of lockdowns around the world and uncertainties on how the coronavirus outbreak may develop.

The company did not give a net profit forecast for the fiscal year through March 2021, but acknowledged operating profit was expected to fall by a whopping 80%.

Sales are expected to recover as the pandemic is brought under control, it said.

U.S. production is resuming gradually, and sales are expected to recover to normal levels by early 2021, Chief Financial Officer Kenta Kon told reporters.

Unfavorable currency fluctuations and trade friction between the U.S. and China also hurt results.

Toyota, which makes the Prius hybrid, Lexus luxury models and the Camry vehicle, recorded a fiscal annual profit of nearly 2.1 trillion yen ($19 billion) for the fiscal year that ended in March.

That was an improvement from 1.8 trillion yen racked up in the previous fiscal year, when its earnings were hurt by the absence of a U.S. tax break and by investment losses.

Toyota said global vehicles sales for the fiscal year that ended in March dropped by 18,372 vehicles from the previous fiscal year to 8.9 million vehicles. They are expected to slip to 7 million vehicles for the fiscal year through March 2021, Toyota said.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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