Toyota Expects Operating Profit To Almost Halve.
Foreign Exchange Movements Hurting The Company.
Toyota Motor Corp said it expects operating profit in the financial year ending next March to drop 44 per cent to 1.6 trillion yen, a four-year low, because of the strength of the yen on foreign exchange markets.
One trillion yen is roughly $1 billion.
Toyota reckon the yen will trade at around 102 to the U.S. dollar compared with an initial estimate of 105 yen and said currency moves will take 1.12 trillion yen from operating profit in this financial year compared with a previous forecast of 935 billion yen.
The yen’s strength accelerated in late June when Britain voted to leave the E.U. and the currency was perceived by investors to be a haven in turbulent times.
In its first quarter ended June 20, Toyota said its operating profit fell 15 per cent to 642 billion yen ($6.34 billion) compared with the same period of 2015.
Analysts said despite the fall in operating profit, Toyota’s underlying performance continue to be impressive with cost reductions and improvements in volume and mix easily outweighing higher operating expenses and investments.