Toyota Motor Corp. said Tuesday its operating profit in the three months ended June almost doubled from a year earlier to 1.12 trillion yen ($7.8 billion), a quarterly record for a Japanese company, helped by the yen's weakness and robust sales as its production recovered from the coronavirus pandemic.
That represents a 93.7 percent increase from the April-June period last year. Its sales rose 24.2 percent to 10.5 trillion yen while its net profit jumped 78.0 percent to 1.31 trillion yen, both a record high for the fiscal first quarter.
The upbeat earnings results came as Toyota ramps up its production capacity across the globe to make up for lost opportunities during the coronavirus pandemic.
An easing in the global chip shortage also allowed pent-up demand to be satisfied, with its group-wide sales in the three-month period rising 8.1 percent to 2.75 million cars, the company said.
Toyota also benefited from a weaker yen. The Japanese currency fell about 8 yen against the U.S. dollar during the year through June, according to Bank of Japan data, amid the widening interest rate differential between Japan and the United States.
Every 1-yen fall against the dollar boosts the automaker's operating profits by 45 billion yen, Toyota says.
The automaker said growth in vehicle sales and price increases in North America and Europe pushed up its operating profit for the quarter by 600 billion yen from a year ago, offsetting the rise in material and labor costs.
By region, its Japanese business saw the biggest growth, with its operating profit doubling to 700.7 billion yen as vehicle sales rose 32 percent on the back of improved production.
Profit in North America rose about 40 percent to 123.3 billion yen while that of Europe more than tripled to 82 billion yen.
Despite Toyota's overall success, its Asian operations recorded a modest decline in profit due to heightened competition with rival companies in the electric vehicle market in China, the world's second-largest economy.
The company kept its full-year earnings forecast unchanged. Its net profit for the year ending March next year is projected to rise 5.2 percent to 2.58 trillion yen, while sales are estimated to reach 38 trillion yen, up 2.3 percent.
Even though its April-June net profit already accounts for half its full-year target, Toyota chose not to revise its earnings forecast upward, saying there has been no significant change in the business environment.
The full-year figures were calculated based on an estimated average exchange rate of 125 yen against the dollar, Toyota said.
The company has said it plans to produce a record 10.1 million cars for the Toyota and Lexus brands in the fiscal year.
Related coverage:
Major Japan firms expect FY 2023 net profit to rise 4% to record high
Toyota logs 1st net profit fall in 4 yrs on higher material costs
Toyota profit falls despite record sales as rising costs bite
