Toyota raises annual profits to ¥4.5 trn in record half-year performance

Toyota Motor’s Head Office. [Courtesy of Toyota Motor]

Toyota Motor Corp., the world’s largest automaker, revised its annual operating profit for this year to 4.5 trillion yen ($29.7 billion), an increase of 1.5 trillion yen from the initial estimate of 3 trillion yen, amid a strong performance.

According to its conference call on Wednesday, Toyota posted 21.98 trillion yen in sales during the period from April to September 2023, marking a 24 percent year-on-year increase. Its operating profits also increased 2.2 times to 2.56 trillion yen over the same period, with its net profits also rising by 2.2 times to 2.59 trillion yen, both reaching all-time highs.

This performance is attributed to the significant increase in sales volume, largely due to the normalization of semiconductor supplies after the Covid-19 pandemic. From April to September, global sales of Toyota and Lexus vehicles increased by 9 percent year-on-year, hitting a record high of 5.17 million units. Favorable exchange rates also played a role, with the Japanese automaker saying its gains from exchange rate fluctuations for the April-September period amounted to 260 billion yen. This was due to the average exchange rate applied to the reported profits, which was 141 yen per U.S. dollar, higher than the initial rate of 134 yen per dollar last year.

With its record performance, Toyota presented significant upward revisions to its annual performance outlook for the period between April 2023 and March 2024: 43 trillion yen in sales, up 16 percent, and 4.5 trillion yen in operating profits, up 65 percent. If Toyota achieves its projected performance, it will become the first Japanese company to top 4 trillion yen in operating profits.

The upward revision is mostly driven by the exchange rate. The automaker estimates that the increase in operating profits due to exchange rate fluctuations will amount to 1.18 trillion yen, meaning about 80 percent of the revised operating profit forecast of 1.5 trillion yen is attributed to the exchange rate effect.