Toyota said yesterday its April-September net profit dived 25%, 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 ¥946.1bn ($9.1bn) in the first half of its fiscal year, down from ¥1.25tn in the same period in 2015.
Operating profit fell nearly 30% to ¥1.11tn, while revenue was off 7.2% at ¥13.07tn.
However the Corolla and Prius hybrid maker boosted its full-year to March net profit forecast to ¥1.55tn from an earlier ¥1.45tn  estimate.
The newest figure is still way down from a record ¥2.31tn 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 kick start 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 centre, 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 5.06mn units, from 4.97mn vehicles in the same period last year, with increases in Japan, Europe and Asia.
Still, vehicle sales fell in the Middle East, Africa and the key North American market, where cheap oil has hit demand for Toyota’s Fuel-efficient offerings including the Prius.