ID :
44550
Fri, 02/06/2009 - 20:54
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https://oananews.org//node/44550
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Toyota cuts forecast again to mark 1st red ink in FY 2008
TOKYO, Feb. 6 Kyodo - Toyota Motor Corp. on Friday lowered its forecast for the 2008 business year to
March to a net group loss of 350 billion yen, the first red ink since it began
releasing net data in 1963, as the pace of falling sales continues to outpace
its expectations amid the global economic crisis.
The forecast represents a sharp reversal from its strong performance prior to
the current business year. The Japanese auto giant, which overtook General
Motors Corp. as the world's largest automaker in 2008 by sales volume, enjoyed
eight consecutive years of increased operating profit, which hit an all-time
high in the 2007 business year.
But faced with sharply weakening demand and a stronger yen, Toyota has been
forced to revise downward for a third time its earnings forecasts for the
current fiscal year.
The projected 350 billion yen loss for fiscal 2008 compares with a net profit
of 50 billion yen projected by the automaker less than two months earlier and
contrasts with a record-high profit of 1.72 trillion yen in the previous
business year.
Toyota began releasing comparable net data from the business year which ended
November 1963.
Toyota also revised downward its sales target for fiscal 2008 to 7.32 million
units from 7.54 million units projected in December.
''We had a really tough time in the October to December period,'' Executive
Vice President Mitsuo Kinoshita said at a press conference, referring to a
sharp downturn in demand after the collapse of U.S. investment bank Lehman
Brothers Holdings Inc. last September.
''Since the Lehman shock on Sept. 15, the financial crisis has spread to hit
the real economy directly, including the consumer durables we make,'' he said,
adding the adverse impact had spread from the United States to Europe and the
rest of the world.
Kinoshita added that the downturn in the automaker's main markets of North
America, Europe and Japan had accelerated further this year, forcing Toyota to
revise its earnings targets downward again in such a short period.
In January, Toyota's sales in the United States plunged 31.7 percent, worse
than a drop of 27.9 percent at Honda Motor Co. and a 29.7 percent fall at
Nissan Motor Co.
In the latest revision, Toyota expanded its operating loss projection from 150
billion yen forecast in December to 450 billion yen, with its sales projection
lowered 2.3 percent from the previous forecast to 21 trillion yen.
In fiscal 2007, Toyota recorded an operating profit of 2.27 trillion yen on
sales of 26.29 trillion yen, both all-time highs.
To combat difficult business circumstances, Toyota said it will cut fixed costs
for fiscal 2009 by an additional 10 percent from the previous year through the
cancellation or postponement of new plant launches and other measures.
As part of its medium-term strategy, Toyota said it will review its product
lineup, which is twice as large as that of Honda, by putting greater emphasis
on the development of hybrid and other green cars, as well as those targeted at
markets in emerging countries.
''We want to make this business year the bottom, and we will work hard (for a
recovery) in the next business year and going forward,'' Kinoshita said.
Tatsuo Yoshida, senior analyst at UBS Securities Japan Ltd., however, sees a
tough road ahead as Toyota's earnings could be damaged further if the yen stays
at its current levels against other key currencies.
The U.S. dollar has traded at around 91 yen since the beginning of this year,
against Toyota's assumption of an average rate of 100 yen for the current
fiscal year.
A stronger yen erodes Japanese exporters' overseas income when repatriated. For
Toyota, every 1 yen of appreciation against the dollar and the euro trims the
company's annual operating profit by 40 billion yen and 6 billion yen,
respectively.
To cope with shrinking demand for vehicles, Toyota is rapidly cutting
production and temporary jobs.
In Japan, Toyota plans to reduce its nonregular workforce to around 3,000 by
the end of March by not renewing workers' contracts, compared with the average
of 9,200 in the January to March period last year.
Kinoshita said Toyota does not plan to eliminate all nonregular jobs, but the
company is undecided about what would constitute an appropriate number as its
production plan has not been finalized.
As for permanent jobs, Kinoshita said Toyota has not implemented any layoffs
during the current economic crisis at home or abroad, and it is considering
introducing a ''work sharing'' scheme to maintain employment by sharing and
reducing workloads.
Despite its reduced production, Kinoshita said Toyota does not plan to close
any of its existing plants.
In the April-December period of fiscal 2008, Toyota's net profit plunged 76.5
percent from a year earlier to 328.83 billion yen and its operating profit
dropped 88.2 percent to 221.52 billion yen on sales of 16.99 trillion yen, down
13.8 percent.
During the nine-month period, Toyota's global car sales fell by 494,000 units
from a year earlier to 6.09 million units.
Dismal sales slashed its net profit for the period by 650 billion yen and the
stronger yen cut its profit by 550 billion yen, the firm said.
Moody's Investors Service said earlier Friday that it has downgraded its
long-term senior unsecured debt rating for Toyota and its subsidiaries to Aa1
from Aaa, with a negative rating outlook.
The rating service agency said the action came after a downgrade review
initiated Dec. 22, meaning Toyota's latest projection cut is not included.
Another major rating agency, Standard & Poor's, also lowered long-term
corporate credit ratings on Toyota and its related entities to AA-plus from
AAA.
==Kyodo
March to a net group loss of 350 billion yen, the first red ink since it began
releasing net data in 1963, as the pace of falling sales continues to outpace
its expectations amid the global economic crisis.
The forecast represents a sharp reversal from its strong performance prior to
the current business year. The Japanese auto giant, which overtook General
Motors Corp. as the world's largest automaker in 2008 by sales volume, enjoyed
eight consecutive years of increased operating profit, which hit an all-time
high in the 2007 business year.
But faced with sharply weakening demand and a stronger yen, Toyota has been
forced to revise downward for a third time its earnings forecasts for the
current fiscal year.
The projected 350 billion yen loss for fiscal 2008 compares with a net profit
of 50 billion yen projected by the automaker less than two months earlier and
contrasts with a record-high profit of 1.72 trillion yen in the previous
business year.
Toyota began releasing comparable net data from the business year which ended
November 1963.
Toyota also revised downward its sales target for fiscal 2008 to 7.32 million
units from 7.54 million units projected in December.
''We had a really tough time in the October to December period,'' Executive
Vice President Mitsuo Kinoshita said at a press conference, referring to a
sharp downturn in demand after the collapse of U.S. investment bank Lehman
Brothers Holdings Inc. last September.
''Since the Lehman shock on Sept. 15, the financial crisis has spread to hit
the real economy directly, including the consumer durables we make,'' he said,
adding the adverse impact had spread from the United States to Europe and the
rest of the world.
Kinoshita added that the downturn in the automaker's main markets of North
America, Europe and Japan had accelerated further this year, forcing Toyota to
revise its earnings targets downward again in such a short period.
In January, Toyota's sales in the United States plunged 31.7 percent, worse
than a drop of 27.9 percent at Honda Motor Co. and a 29.7 percent fall at
Nissan Motor Co.
In the latest revision, Toyota expanded its operating loss projection from 150
billion yen forecast in December to 450 billion yen, with its sales projection
lowered 2.3 percent from the previous forecast to 21 trillion yen.
In fiscal 2007, Toyota recorded an operating profit of 2.27 trillion yen on
sales of 26.29 trillion yen, both all-time highs.
To combat difficult business circumstances, Toyota said it will cut fixed costs
for fiscal 2009 by an additional 10 percent from the previous year through the
cancellation or postponement of new plant launches and other measures.
As part of its medium-term strategy, Toyota said it will review its product
lineup, which is twice as large as that of Honda, by putting greater emphasis
on the development of hybrid and other green cars, as well as those targeted at
markets in emerging countries.
''We want to make this business year the bottom, and we will work hard (for a
recovery) in the next business year and going forward,'' Kinoshita said.
Tatsuo Yoshida, senior analyst at UBS Securities Japan Ltd., however, sees a
tough road ahead as Toyota's earnings could be damaged further if the yen stays
at its current levels against other key currencies.
The U.S. dollar has traded at around 91 yen since the beginning of this year,
against Toyota's assumption of an average rate of 100 yen for the current
fiscal year.
A stronger yen erodes Japanese exporters' overseas income when repatriated. For
Toyota, every 1 yen of appreciation against the dollar and the euro trims the
company's annual operating profit by 40 billion yen and 6 billion yen,
respectively.
To cope with shrinking demand for vehicles, Toyota is rapidly cutting
production and temporary jobs.
In Japan, Toyota plans to reduce its nonregular workforce to around 3,000 by
the end of March by not renewing workers' contracts, compared with the average
of 9,200 in the January to March period last year.
Kinoshita said Toyota does not plan to eliminate all nonregular jobs, but the
company is undecided about what would constitute an appropriate number as its
production plan has not been finalized.
As for permanent jobs, Kinoshita said Toyota has not implemented any layoffs
during the current economic crisis at home or abroad, and it is considering
introducing a ''work sharing'' scheme to maintain employment by sharing and
reducing workloads.
Despite its reduced production, Kinoshita said Toyota does not plan to close
any of its existing plants.
In the April-December period of fiscal 2008, Toyota's net profit plunged 76.5
percent from a year earlier to 328.83 billion yen and its operating profit
dropped 88.2 percent to 221.52 billion yen on sales of 16.99 trillion yen, down
13.8 percent.
During the nine-month period, Toyota's global car sales fell by 494,000 units
from a year earlier to 6.09 million units.
Dismal sales slashed its net profit for the period by 650 billion yen and the
stronger yen cut its profit by 550 billion yen, the firm said.
Moody's Investors Service said earlier Friday that it has downgraded its
long-term senior unsecured debt rating for Toyota and its subsidiaries to Aa1
from Aaa, with a negative rating outlook.
The rating service agency said the action came after a downgrade review
initiated Dec. 22, meaning Toyota's latest projection cut is not included.
Another major rating agency, Standard & Poor's, also lowered long-term
corporate credit ratings on Toyota and its related entities to AA-plus from
AAA.
==Kyodo
