Toyota Warns Strong Yen Could Push Profits Down 35%
Toyota (TM) - Get Report has seen another year of profits rising, but warns that the winning streak may be over due to a stronger yen.
Net income at the Japanese car maker increased 6.4% to ¥2.31 trillion ($21.3 billion) for the fiscal year ended March 31, 2016 compared with ¥2.17 trillion in the previous year.
Toyota saw a 4.3% sales increase in North America. It was the only region that had an increase in the year.
The car maker has projected net income may fall 35% to ¥1.5 trillion for the fiscal year ending March 2017, assuming an exchange rate of ¥105 to the dollar. The stronger yen and a slowdown in emerging markets are contributing to the forecast.
Much of the car maker's pain comes from having to replace faulty Takata-made airbags. Toyota did not confirm how much the recalls would cost, but they are expected to split the bill with Takata. The car maker is the second-biggest customer of Takata behind Honda.
The forecast does not include the effects of the suspension of operations on vehicle assembly lines in Japan due to the earthquake last month.
Toyota is planning to buy back 100 million shares and will pay a year-end dividend of ¥110 per common share. The company also paid an interim dividend of ¥100.
