Toyota has published its financials for the 2009 fiscal year that ended on March 31. The matter had been a center of speculations for months. First, a loss was predicted. Then, there were speculations that Toyota would report a slight gain, of $500m. Last weekend, Japan’s Yomiuri newspaper said the gain could be as large as $1.1b . They were all wrong. The official numbers are in. And the numbers are …
In a corporate communiqué, Toyota declared that “net income increased from a loss of 437 billion yen to 209.4 billion yen.” If my currency calculator is not mistaken, then that’s $2.26b, double the wildest speculations.
Also, it’s not EBIT, it’s cool net profit. In accordance with U.S. GAAP. (EBIT was 291.4b yen, or $3.15b.)
The surprising numbers are attributed to cost cuts and recovering auto sales.
Not too surprisingly, sales in the U.S.A., Europe, and “other regions” were down, balanced by strong sales in Japan and “Asia.” Global sales declined 8 percent on the year to 18.95 trillion yen ($205b). Consolidated vehicle sales for the fiscal year totaled 7.24m units, a decrease of 330 thousand units from the last fiscal year.
For the current fiscal year through March 2011, Toyota expects a conservative increase of 1 percent in unit sales, and a net profit of 310 billion yen, that’s $3.14b in today’s dollars. Toyota expects the yen to strengthen more against the dollar, and to fall against a recovering Euro. In their budget, the exchange rate is 90 yen to the U.S. Dollar (currently 92.4), and 125 yen to the Euro (currently 117).
According to The Nikkei [sub], Toyota “has not decided on its dividend payment.” Technically correct. However, Toyota’s press release says that Toyota ”also announced a cash dividend for the full fiscal year of 45 yen per share, to be proposed at the general shareholders’ meeting in June.” That’s the same as last year, and the proposal is unlikely to be shot down.
Toyota is not in a mood to spend their unexpected profits. The Nikkei [sub] says that Akio Toyoda announced that executives will receive a costly haircut. “To show our firm, renewed resolve to improve quality, we will forgo bonus payments for senior managing directors and higher-ranking executives this year, as we did last year,” Toyoda told The Nikkei.
“Representative directors will also return some of their compensation.” Let’s see whether that part of “The Toyota Way” will be copied by a U.S. board of directors.
Toyota’s annual profit was approximately $1.2 billion. With an 8% sales decline and terrible weakness in their primary markets, Toyota is not in a position to celebrate anything.
I will also tell you this. For many more folks these days, Toyota is now seen as a less favorable alternative to Ford, Honda and Hyundai. The recovery to their reputation is going to take several years and the argument for buying a Toyota will have to go far beyond the ‘quality’ paradigm.
Toyota City is not quite a happy place for the corporate chieftains these days.
Who’s giving you your exchange rates? Fire your banker.
One dollar currently buys 92.82 yen, so 209.4 billion yen in dollars is?
This story was on Yahoo this morning
http://www.indianagazette.com/articles/2010/05/11/news/doc4be96c0e0c88a873803396.txt
That’s Quarterly Profit. I’m referring to full year profit, and I’m quoting Toyota’s official statement. The annual profit is further down in the Yahoo story: “For the fiscal year through March 31, Toyota posted a 209 billion yen ($2.3 billion) profit, a dramatic reversal from a 437 billion loss in the previous fiscal year, which was the automaker’s worst annual red ink since being founded in 1937.”
A re-invigorated, re-energized Toyota is a force to be reckoned with.
There are no fundamental problems that will prevent them from staying at the front the auto industry for years to come.
Is this as bad as Ford’s firestone tires? Cause Ford is doing pretty well in USA market right now. I think Toyota will do fine, they’re willing to cut CEOs’ bonuses which is unimaginable for the USA big three. Their lineup is finally offering performances while keeping their bread and butter transportation appliance cars.
In 2007 and 2008 over the course of a year I managed to save enough money that if I lost my job I could make it a year without one, was it possible to save like that? Yes. Is it sustainable? No. Toyota has only done the same (while at the same time Ford was speeding up it’s product investment and eating the loss).
It’s the cars that come out in 2013 and 14 that will reflect what has just happened at Toyota, just as it was the mid-70’s that only began to reflect what GM had done in ’71.
With as little as they pay to service their debt. it is no surprise they are able to cut back on expenses when needed.
As I said on the earlier thread… kudos to Toyota. The automaker has proven it takes more to keep them down than a curiously-timed government witch hunt.
What’s DaHood’s email address? I think that Paulie Walnuts-wannabe should have his Inbox deluged with copies of every story about Toyota’s profit! Nice try, jackass.
Why does Japan keeps the yen at this high level? They are in a decade-long recession and deflation. Devaluing their currency could help them resolve these 2 problems…
The Yen is a free floating currency. It reacts to the market. The market seems to want Yen.
It’s been accused by some who don’t know forex of being undervalued. Boy are they ever wrong.
@Bertel Schmitt
The Yen is a free floating currency, but the Japanese government still controls its value. If they want to devaluate it, they only need to print more.
I don’t believe anything that Toyota reports. And I don’t care if they make money or not. They can flourish, or they can go belly up. Makes no difference to me because I won’t ever buy a Toyota or invest in Toyota. Screw them.
I’ll buy a Toyota again.
And I just recently decided to remove Ford from my buying and airport rental options.
The Mike Roe radio and television commercials are stupid, condescending, and just plain annoying. Who the eff is this dude, and why does he strike me as a snake who just slithered off a dealer’s lot?
Yes, I have taken Ford off my list.
I understand that the reason may sound superficial. But I assure you, it’s my version of the “broken windows” theory. You see, if they get away with insulting and annoying the viewer/listener in their adverts (which have been going on for months now), then it stands to reason that they will not hesitate to make and sell an equally insulting and annoying product.
I will re-assess in a year or three, whenever I decide I’m in the market. But if something happened to my current car, my next one will NOT be a GM, Chrysler, or now… a Ford.
Just stop insulting us!
Point taken… and my apologies…
On the flip side, an 8% decline is still a very nasty drop and I’m not quite convinced that the recent spate of bad publicity in the US had a minimal impact.
In my market there were a slew of Toyotas traded in over the last few months. It’s abated a bit for now. But Toyota no longer has the quality crown in the North American market.