Toyota Earns Record Net Profit in FY 2017

May 10, 2018

Tokyo- Toyota Motor Corp. on Wednesday reported a record group net profit of 2,493,983 million yen for fiscal 2017, which ended in March, up 36.2 pct from the previous year, thanks to the yen's weakening and corporate tax cuts in the United States.

The leading Japanese automaker saw its net profit increase for the first time in two years.

The annual net profit was the highest ever achieved by any Japanese company, surpassing the previous record of some 2,312 billion yen, scored by Toyota itself in fiscal 2015.

The tax cuts in the United States helped raise Toyota's fiscal 2017 net profit some 250 billion yen.

Toyota's consolidated sales in the latest year grew 6.5 pct to a record 29,379,510 million yen as sport-utility vehicles and hybrids sold well. The Toyota group's overall global vehicle sales totaled some 10.44 million units, surpassing the 10-million mark for the fifth straight year.

Toyota's group operating profit increased 20.3 pct to 2,399,862 million yen. While the weaker yen pushed up its operating profit by 265 billion yen, the firm struggled in North America, one of its main markets, due to an increase in sales incentives paid to dealers.

For fiscal 2018, Toyota expects to suffer the first falls in group sales and profits in two years, due to negative impacts from the yen's recent strength.

Net profit is projected at 2.12 trillion yen, down 15.0 pct, operating profit at 2.3 trillion yen, down 4.2 pct, and sales at 29 trillion yen, down 1.3 pct. Meanwhile, the group's overall vehicle sales are forecast to reach a record 10.5 million units.

The earnings estimates are based on an assumed exchange rate of 105 yen to the dollar, compared with 111 yen for fiscal 2017.

Toyota expects the yen's appreciation to have a negative impact of 230 billion yen on its fiscal 2018 operating profit.

"We can't offset the firmer yen's impacts unless we earn more," Toyota Executive Vice President Koji Kobayashi told a press conference in Tokyo.

Global automakers are in fiercer competition to develop next-generation technologies, such as self-driving vehicles.

"We'll promote cost reductions and expand investment in new business fields and technologies," Toyota President Akio Toyoda said. Jiji Press