TOKYO”•Toyota said Tuesday its April-September net profit dived 25 percent, hit by a sharp rally in the yen and another fall in North American sales, but it upgraded its full-year outlook.
The world’s biggest automaker reported a net profit of 946.1 billion yen ($9.1 billion) in the first half of its fiscal year, down from 1.25 trillion yen in the same period in 2015.
Operating profit fell nearly 30 percent to 1.11 trillion yen, while revenue was off 7.2 percent at 13.07 trillion yen.
However, the Corolla and Prius hybrid maker boosted its full-year to March net profit forecast to 1.55 trillion yen from an earlier 1.45 trillion yen estimate.
The newest figure is still way down from a record 2.31 trillion yen net profit in the most recently ended business year.
The decline in profits underscores the negative impact that a resurgent currency has had on firms doing much of their business abroad.
Japan’s exporters reaped windfall profits over the past few years as government efforts to kickstart the world’s number three economy sharply weakened the yen.
That was good for firms such as Toyota and rivals Honda and Nissan because repatriated foreign profits were worth more when the yen was weak and because it boosted their competitiveness overseas.
But the currency has rallied since the start of the year as volatile equity markets and Britain’s vote to exit the European Union boosted demand for a unit widely seen as a safe investment.
“The yen’s strength remains a major factor squeezing earnings in the Japanese auto sector,” said Shigeru Matsumura, analyst at SMBC Friend Research Center, before the results were published.
“Japanese carmakers need to make further efforts to make their corporate structure more resistant to the yen’s appreciation,” he added.
Toyota’s vehicle sales in April-September ticked up to 5.06 million units, from 4.97 million vehicles in the same period last year, with increases in Japan, Europe and Asia.