Toyota likely to be in red in fiscal 2nd half

TOKYO, Dec. 13 Kyodo - Toyota Motor Corp. is expected to further revise downward its group earnings
projections for the second half of the current fiscal year and to report an
operating loss of about 100 billion yen in the October-March period, informed
sources said Saturday.
The expected downward revisions, to be announced in January or later, stem from
continuing declines in global auto sales and the yen's appreciation against the
U.S. dollar and the euro, the sources said.
''(Toyota's) global auto sales will be reduced about 1 million units from the
projection made in November,'' one of the sources said.
It will be the first time that Toyota has reported a group operating loss on a
half-year basis since 1999, when the top Japanese automaker adopted U.S.
accounting standards.
Toyota lowered its earnings estimates for the second half in early November. At
that time, Toyota anticipated a group net profit of 550 billion yen, down 68.0
percent from a year before, and an operating profit of 600 billion yen, down
73.6 percent, on sales of 23 trillion yen, down 12.5 percent.
With another downward revision, Toyota's operating profit for the entire fiscal
year to next March is expected to fall by around 80 percent from the previous
year, according to the sources.
The November figures were revised downward from the initial estimates -- a net
profit of 1.25 trillion yen, an operating profit of 1.6 trillion yen and sales
of 25 trillion yen.
In November, Toyota also cut its group global auto sales projection for fiscal
2008 to 8.24 million units, down 673,000 units from the previous year. Toyota's
group sales include vehicles sold by Daihatsu Motor Co. and Hino Motors Ltd.
Since then, Toyota has been experiencing a slump in sales of small vehicles,
which had been relatively strong compared to those of larger vehicles, the
sources said. Auto sales in emerging economies, which had been robust, have
also weakened.
Toyota plans to unveil its group auto sales target for 2009 on Dec. 22, and is
mulling cutting the target to between 8 million and 8.5 million units from
approximately 9.7 million units currently, the sources said.
Japan's 12 major automakers and truck makers have decided to slash their global
production by more than 2 million units in fiscal 2008 through next March,
according to a Kyodo News tally.
Toyota assumed a foreign exchange rate of 100 yen against the U.S. dollar for
the October-March period, but the dollar has fallen to around 90 yen due partly
to concern about the future of troubled U.S. automakers.
The dollar traded at 89.56-59 yen at 5 p.m. Friday in Tokyo after dropping at
one point to a fresh 13-year-low in the lower 88 yen level earlier that day.
Every 1 yen of appreciation against the dollar trims Toyota's annual operating
profit by about 40 billion yen.
Some analysts said Toyota could incur a group operating loss in fiscal 2009
ending March 2010 if demand for new automobiles remains sluggish in the United
States and other major markets and the yen continues to appreciate.
==Kyodo
2008-12-13 21:32:43